John Lewis reports Christmas sales rise but margin pressure builds

John Lewis reports Christmas sales rise but margin pressure builds

The department store chain reported good like-for-like sales growth 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 the retailer warned its debts were growing relative to cashflow and its chairman Sir Charlie Mayfield said: "Looking ahead to 2018/19 we expect trading to be volatile due to the economic environment and anticipate that competitive intensity will continue, driven by the structural changes taking place in the retail industry".

But downward pressure on margins continued as the retailer chose to keep prices competitive, even while costs were higher due to a fall in the value of sterling.

John Lewis gross sales meanwhile, were GBP1.03bn, up 3.6% on past year and 3.1% on a like-for-like basis and "significantly" outperformed the market by 4.5%.

"Our inspiring Christmas proposition, innovative product assortment and competitive position on price helped us to build sales momentum across the period [for John Lewis]".

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.

Sales at Waitrose were also up during the six-week period, although at 1.4 per cent the rate of growth was slower than the 4.8 per cent it posted during the festive period in 2016.

However, Home sales during the period were down -0.3% as consumers proved less receptive to big-ticket purchases.

On their own, Waitrose's sales rose 1.4 per cent year-on-year to £928 million as well as 1.5 per cent on a like-for-like basis, while the John Lewis department store chain saw sales grow 3.6 per cent year-on-year to £1.03 billion and 3.1 per cent on a like-for-like basis.

John Lewis Partnership will report its full year results ending January 27 on March 8.

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