John Lewis urges Com­mons de­bate on EU as prof­its drop

Belfast Telegraph - - BUSINESS - BY STAFF RE­PORTER

JOHN Lewis’s chair­man has called for a “se­ri­ous par­lia­men­tary de­bate” on Brexit af­ter prof­its at the group tanked as it was hit by fall­ing con­sumer de­mand and cost in­creases linked to the weak pound.

Sir Char­lie May­field added his voice to a cho­rus of busi­ness lead­ers wad­ing into the Brexit ar­gu­ment as fears mount that Bri­tain will crash out of the Euro­pean Union with­out a deal.

“Brexit is hav­ing an im­pact on ev­ery­one, ster­ling is weaker and con­fi­dence is be­ing af­fected,” Mr May­field said.

“There needs to be a se­ri­ous par­lia­men­tary de­bate to find the best way for­ward for the coun­try and the economy. The core prin­ci­ples need to be thrashed out. If they’re not, there is a greater risk of a dis­or­derly out­come.”

His com­ments came af­ter the John Lewis Part­ner­ship blamed fall­ing con­sumer de­mand and cost in­creases linked to the Brexit-hit pound for prof­its more than halv­ing.

The group, which is be­hind the epony­mous department store chain and posh su­per­mar­ket Waitrose, saw pre-tax prof­its for the six months to the end of July plum­met 53.3% to £26.6m.

The fig­ure in­cludes ex­cep­tional items linked to re­struc­tur­ing, prop­erty and re­dun­dancy costs.

Sir Char­lie said the group suf­fered in cat­e­gories linked to the hous­ing mar­ket, which has ex­hib­ited a marked slow­down since the EU ref­er­en­dum.

“The first half of this year has seen in­fla­tion­ary pres­sures driven by ex­change rates and po­lit­i­cal un­cer­tainty,” he added.

“These have damp­ened cus­tomer de­mand, es­pe­cially in cat­e­gories con­nected to the hous­ing mar­ket. The ex­change rate-driven in­crease in cost prices has also put pres­sure on mar­gin.”

Re­tail­ers have been among the hard­est hit by the de­cline of the UK cur­rency, which has re­sulted in costs and shop prices soar­ing, dent­ing con­sumer de­mand.

How­ever, Sir Char­lie main­tained that the group had held back on in­creas­ing prices across “many ar­eas”.

Waitrose saw its op­er­at­ing profit fall more than 17.4% to £100.8m as the su­per­mar­ket de­cided to take the hit and ab­sorb ris­ing costs, rather than pass­ing them on to shop­pers.

Op­er­at­ing profit at John Lewis grew 38.7% to £50.2m

Gross sales across the part­ner­ship rose 2.3% to £5.4bn, but like-for-like sales showed only muted growth. Like-for-like sales at Waitrose rose 0.7% while at John Lewis com­pa­ra­ble sales nudged up just 0.1%.

Next said trad­ing had turned a cor­ner af­ter a tough spell

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