Price matching hits John Lewis

John Lewis' flagship store in Leeds
John Lewis' flagship store in Leeds
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​John Lewis ​has warned that annual profits will take a hit due to its determination to keep prices low for customers at a time of soaring costs.​

The department store ​chain reported ​good ​like-for-like sales grow​th​ ​of ​3.1​ per cent​ in the six weeks to December 30​ and sister company Waitrose booked a comparable sales rise of 1.5​ per cent​.

But chairman Sir Charlie Mayfield said that the John Lewis commitment to being "never knowingly undersold" - the chain's price matching promise - alongside soaring costs linked to the Brexit-hit pound, will dent full-year profits.

"The pressure on margin seen in the first half of the year has intensified because of our choice to maintain competitive prices, despite higher costs mainly due to the weaker exchange rate​," he said.​

"This will negatively affect full-year financial results as indicated previously​."

The plunge in sterling following the referendum has driven up costs for businesses and de​nted consumer confidence, hammering retailers in particular.

Sir Charlie said that he expects trading to be "volatile" this year due to the economic environment and structural changes taking place in the retail industry.

​On a brighter note, ​John Lewis said the Black Friday week was the busiest in its history and included a record hour for online trade.

At Waitrose, the firm said it created a "real festive buzz" as it launched 500 new products, such as Heston Citrus Sherbert Lazy Gin, which sold a month's worth of stock in one day.

Gross sales at the ​p​artnership ​rose 2.5​ per cent​ to £1.96​bn.

Waitrose booked a 1.4​ per cent​ increase in gross sales to £928​m, while John Lewis recorded a 3.6​ per cent​ rise to £1​bn.