John Lewis warn of profits slide due to pension costs
John Lewis Partnership has posted a 26% slide in half-year profits after being hit by costs of its staff pension fund and warned full-year results would also be sharply lower in a tough retail market.
It said trading at its Waitrose supermarket chain came under pressure amid "turmoil" in the sector, with comparable store sales down 1.3% - the first fall for seven years.
John Lewis has battled planners for a decade in a bid to open a store at Sprucefield next to the M1 motorway.
The partnership said underlying profits sank to £96m in the six months to August 1 as recent stock market woes impacted its pension fund and left it facing higher charges.
After stripping out these costs and one-off boosts from property sales last year, it said trading profits were broadly level in the first half as a 3% rise in sales at its department store chain helped offset the supermarket woes.
But it said supermarket trading was set to remain tough as the major players wage a fierce price war to compete with the increasing might of discounters Aldi and Lidl.
Tough trading and an extra £60m of pension fund charges this financial year are expected to drive annual pre-tax profits to between £270m and £320m, against £342.7m previously.