John Lewis first half profits drop by more than 50%

Department store and supermarket group John Lewis saw its profits more than halve in the first half of the year to £26.6m as it was forced to absorb £56.4m in restructuring costs, along with an increase in input costs and faltering consumer confidence.

Total sales at the John Lewis Partnership (which includes Waitrose) reached £5.4bn, up 2.3%, while profits after tax dropped -53.3% due to costs associated with restructuring roles and redundancies both at John Lewis and Waitrose, along with increased input costs due to sterling's weakness since the Brexit vote.

The John Lewis department store posted total sales of £2.07bn and an operating profit of £29.1m, down -10.2%. Operating profit before exceptional items was £52.2m, up 39.7%.

Chairman Sir Charlie Mayfield said consumer demand had weakened due to inflationary pressures and political uncertainty: "As we anticipated in our full year results statement in March, the first half of this year has seen inflationary pressures driven by exchange rates and political uncertainty. These have dampened customer demand, especially in categories connected to the housing market," he said.

However he added that fashion had seen improvements, partly due to the launch of its new exclusive denim-anchored brand AND/OR. "Against that backdrop, our market share gains in fashion stood out. The exchange rate driven increase in cost prices has also put pressure on margin. We have chosen to hold back on increasing prices across many areas," Mayfield said.

Speaking to the BBC this morning Mayfield said that Brexit and the uncertainly about the form it would take had had a detrimental affect on consumer confidence. "We should be under no illusions, Brexit is having an effect on the economy, no question. It is the same for everybody and the main effects are sterling and confidence," he told the broadcaster.