All eyes on John Lewis as results in store from bellwether

A number of major retailers are publishing trading updates which will be studied closely by investors and analysts.

Retail bellwether John Lewis Partnership, which posts half-year figures on Wednesday, has found the going much tougher since it announced a 20 per cent jump in annual profits to £367.9m for the year to January 31.

The employee-owned firm has already stated that sales in the six months to July 30 will be up by 6.5 per cent, from £3.8bn a year earlier, but, like its peers, the group has had to move swiftly to adapt to challenging economic conditions.

A year ago interim profits surged by 28 per cent to £110.5m, but conditions are much tougher this time as the battle for consumers’ cash intensifies and promotional activity affects the bottom line.

The group’s 76,500 staff shared a bonus pot of £194.5m last year, up from £151m in 2009/10, and will be looking at the half-year report for any clues about the size of this year’s payout.

One bright spot has been supermarket arm Waitrose, which has steadily increased its market share despite the squeeze on consumer spending.

It has benefited from people eating out less and buying a ready-made alternative to have at home, according to market researcher Kantar.

Waitrose’s sales rose by 8.7 per cent over the six months, which helped to bolster the group’s performance overall, as the department store figures were more muted, with sales up by 2.6 per cent or 0.7 per cent when excluding VAT.

Department stores boss Andy Street said in July that he was pleased with the performance, particularly given tough markets generally for homewares and big-ticket electrical items. Sales in both divisions rose, with home boosted by linens and blinds, while the technology arm was buoyed by strong IT sales.

The online business is also doing well, with first-half sales up by 27 per cent.

The group has a total of 32 stores and this will increase tomorrow with the opening of a new shop at the Westfield centre in Stratford, east London, next to the Olympics site. John Lewis will occupy the largest shop in the complex and expects to sell an Olympic souvenir badge, costing £6, every three seconds.