We’ll pay the price

John Lewis keeps Never Knowingly Undersold vow despite it being key factor in £95m slump

DEFIANT John Lewis has insisted it will keep its 90-year-old price pledge – despite it being a major factor in its 99% profits slump.

The department store chain took a pounding after matching deep discounting by rivals including House of Fraser and Debenhams in the six months to the end of July, crashing from £96.2million to £1.2million.

The biggest hit from the firm’s price cuts, in line with its Never Knowingly Undersold promise, came in fashion and beauty. And experts have questioned whether the system should be ditched.

Greg Lawless, retail analyst at City firm Shore Capital, said: “It may have been around for 90 years but the market is very different now.”

But asked if he would abandon the policy, Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: “We have had Never Knowingly Undersold for over 90 years and it is extremely valuable and has proven to be so for many, many years, so the short answer is no.”

The refusal came despite what he said had been the heaviest discounting he had seen “in almost a decade”.

It is not the first time Never Knowingly Undersold has been criticised. An investigation last year found various loopholes which meant prices did not fall for all customers.

And the promise does not apply to prices at online-only retailers, such as Amazon – a major rival when it comes to electrical goods.

Widespread discounting was one of several reasons why half-year profits at the John Lewis Partnership, which includes its 50 department stores as well as supermarket chain Waitrose, crashed.

Sir Charlie said another big factor was the weak pound, which fell sharply after the 2016 EU referendum result.

But Brexit Secretary Dominic Raab hit back, saying: “I think there will be the temptation from some businesses that aren’t doing so well to blame Brexit and I think that’s a mistake.”

Sir Charlie insisted that he did not blame Brexit for the whole slump in the group’s profits.

But he added: “The fact is, sterling is weaker, it’s more expensive to import goods... so we have to absorb that within our margin.”

John Lewis – which recently re-branded as John Lewis and Partners, in reference to the workers who own it – also stressed that it made most of its profits in the second half of the year.