- John Lewis partnership has warned that earnings will fall this year
- It will close five Waitrose stores to release some capital
- Chairman said ‘this is not a blip’ in reference to the fast changing retail market
- Groups has decided to add ‘and partners’ to signs for John Lewis and Waitrose stores to mark itself out as different to rivals
The John Lewis Partnership, which operates the department store and upmarket grocery chain Waitrose, warned today that profits for the first half of this year will be ‘close to zero’ amid a ‘major shift’ for the High Street.
The group also said it wants to further differentiate itself from rivals, to boost sales and loyalty and will add ‘and partners’ to the name on signs for both John Lewis and Waitrose.
In a scheduled strategy update, the retailer said earnings for the full year will likely be ‘substantially’ lower than last year too, when it reported a 77 per cent fall in pre-tax profit to £104m.
John Lewis partnership has felt the impact of uncertainty and change in the UK retail market
It expects to see profit growth at Waitrose, but a decline at John Lewis and will face ‘significant extra costs’ across the partnership level as it invests in IT.
Amid what it described as a ‘major shift’ in the market, the firm will chip away at its 353-strong Waitrose estate, disposing of four of its convenience shops and one small supermarket.
The stores set for closure are: Spinningfields in Manchester, Manchester Piccadilly, Colmore Row in Birmingham, Portman Square in London and its supermarket in Camden.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: ‘It is very important that we feel the jeopardy of what is happening right now.
‘This isn’t a blip, it is a major shift and it has a while to run.’
The retailer also pledged to focus on ‘differentiation — not scale’, arguing that ‘difference is the only way to add value for customers’.
It will therefore rebrand the chains as ‘John Lewis and Partners’ and ‘Waitrose and Partners’ as it bids to set itself apart from its struggling rivals Debenhams and House of Fraser by flaunting its partner-owned structure.
John Lewis Partnership will close five of its 353 Waitrose stores as it comes under pressure from Aldi and Lidl
Experts believe Waitrose has felt the heat from German discounters Aldi and Lidl, which continue to gobble market share.
The grocery market chalked up two years of continuous growth, according to the latest figures from Kantar Worldpanel, but in the last three months, Waitrose grew sales just 0.1 per cent.
Supermarket data for the 3 months to June 17 puts Waitrose far behind the discounters