John Lewis customers spend less as inflation bites

John Lewis customers are cutting back on spending in department stores and Waitrose supermarkets due to the rising cost of living, the company said.

The retailer said while the number of shoppers was up from last year, customers were spending less.

The company reported a £99 million loss in the first half of its trading year.

Its boss, Dame Sharon White, said the company had faced “unprecedented” cost inflation on food and merchandise.

She said customers were less likely to spend on “large” household items, shifting their spending to dining out and vacationing.

“No one could have predicted the magnitude of the cost of living crisis that has materialized, with energy prices and inflation exceeding all expectations,” said Dame Sharon.

“As a company, we are facing unprecedented cost inflation in groceries and general merchandise.”

However, she said it was “not uncommon” for the John Lewis Partnership to report a loss in the first half of the year as its trading was “heavily deferred to Christmas” and most of its profits come in the final months of the year.

In the first half of last year, the partnership reported a loss of £29million.

The company said its losses this year were due to a combination of rising wholesale prices for goods that aren’t being passed on to customers, households cutting back on spending and the “unwinding” of Covid shopping habits.

At John Lewis, fashion sales soared as people shopped for trips and summer vacations. However, revenue from the household and technology ranges, which had been performing well at the height of the pandemic, fell.

The company said the impact of the rise in the cost of living, particularly in relation to energy costs, has been “obvious in spending patterns,” with sales of its own-brand items up 28% and energy-saving goods, such as air fryers and smart thermostats, increasing.

Dame Sharon said the outlook for the remainder of the year was “highly uncertain due to the cost of living crisis and its impact on discretionary spending and the criticality of our Christmas trading season”.