Profits tumble at John Lewis

'‹The John Lewis Partnership has reported a 9'‹9 per cent plunge in underlying pre-tax profits to '‹just '‹Â£1.2'‹m for the six months to July 28.

John Lewis has stores in Leeds, York and Sheffield

​In a very tough period for retailers, the group warned that profits in the full 2018-19 financial year ​will also be substantially lower.

T​he group, which has its Northern flagship store in Leeds and two other stores in York and Sheffield, blamed ​challenging times and the most promotional market for nearly a decade.

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​Profits at John Lewis & Partners ​were squeezed by strong competition ​following a decision to keep prices low despite inflation​. The firm said it has offered unprecedented levels of price matching through its Never Knowingly Undersold pledge.

Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: "These are challenging times in retail."

He added the group was seeing the "most promotional market we've seen in almost a decade", with other retailers discounting heavily.

"With the level of uncertainty facing consumers and the economy, in part due to ongoing Brexit negotiations, forecasting is particularly difficult but we continue to expect full-year profits to be substantially lower than last year for the Partnership as a whole," he warned.

The firm - which recently rolled out the & Partners rebrand across the group - had ​warned over profits at a strategy update in June, when it also said it would shut another four Waitrose convenience shops and a small supermarket, affecting around 200 staff.

The half-year results showed on a statutory basis, pre-tax profits slumped 80.5​ per cent​ to £6​m.

John Lewis department stores slumped to an underling operating loss of £19.2​m.

Like-for-like sales at the chain fell 1.2​ per cent​.

This ​was ​offset ​by ​a better performance at Waitrose, which remained in profit albeit down 12.2​ per cent​ at £96.4​m on an underlying basis.

Like-for-like sales rose 2.6​ per cent​ at the supermarket, thanks to a marked improvement in the second quarter, with the grocery chain on track for a full-year trading profit.

Sir Charlie said the group expects profit growth in Waitrose to continue to be offset by the squeeze at John Lewis.

​He pledged to continue with plans to invest in the group - at a rate of £400​m to £500​m a year.

"This will take a lot of hard work from all of our partners, but we are confident in our commitment, drive and ability to deliver the partnership's strategy," he said.