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| Version 2 | Version 3 |
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| John Lewis profits hit by competition and higher pay | John Lewis profits hit by competition and higher pay |
| (about 2 hours later) | |
| Profits at the John Lewis Partnership have been hit by a "very competitive" retail market and higher staff pay. | Profits at the John Lewis Partnership have been hit by a "very competitive" retail market and higher staff pay. |
| Pre-tax profits for the six months to July fell by 14.7% to £81.9m and are expected to remain under pressure. | Pre-tax profits for the six months to July fell by 14.7% to £81.9m and are expected to remain under pressure. |
| Like-for-like sales at John Lewis department stores rose 3.1% during the half year, but fell 1% at Waitrose supermarkets. | Like-for-like sales at John Lewis department stores rose 3.1% during the half year, but fell 1% at Waitrose supermarkets. |
| John Lewis chairman Sir Charlie Mayfield told the BBC that market conditions were tough. | John Lewis chairman Sir Charlie Mayfield told the BBC that market conditions were tough. |
| "This is a very competitive market. We're committed to having great service and great prices. And then also, we're taking steps to prepare the business for the future," he said. | "This is a very competitive market. We're committed to having great service and great prices. And then also, we're taking steps to prepare the business for the future," he said. |
| Clothing retailer Next also warned on Thursday that recent trading had been "challenging and volatile" as it reported a slide in sales at its shops. | |
| Operating profits for John Lewis stores fell 31.2% to £32.4m and were down 28.9% to £96.3m for Waitrose. | Operating profits for John Lewis stores fell 31.2% to £32.4m and were down 28.9% to £96.3m for Waitrose. |
| Retail analyst Nick Bubb described the profits as "disappointing" and said he had expected the pre-tax figure to rise to about £100m. | |
| He also described a £25m charge for not proceeding with the development of some new Waitrose stores as "eye-grabbing". | He also described a £25m charge for not proceeding with the development of some new Waitrose stores as "eye-grabbing". |
| John Lewis said first-half profits were always lower and often more volatile than the second half of the year, which usually accounts for at least two-thirds of the annual total. | John Lewis said first-half profits were always lower and often more volatile than the second half of the year, which usually accounts for at least two-thirds of the annual total. |
| Total sales and market share were both higher, while the EU referendum result had little impact on sales. | Total sales and market share were both higher, while the EU referendum result had little impact on sales. |
| "Instead there are far-reaching changes taking place in society, in retail and in the workplace that have much greater implications," Sir Charlie said. | "Instead there are far-reaching changes taking place in society, in retail and in the workplace that have much greater implications," Sir Charlie said. |
| "Our ownership structure makes it especially important that we manage the partnership carefully and thoughtfully for the long term and our plans anticipate the impact of these bigger changes." | "Our ownership structure makes it especially important that we manage the partnership carefully and thoughtfully for the long term and our plans anticipate the impact of these bigger changes." |
| He said the group had decided to focus its investment on IT, its distribution network and staff pay. | He said the group had decided to focus its investment on IT, its distribution network and staff pay. |
| Rising costs | Rising costs |
| John Lewis is an employee-owned partnership that shares its profits among its more than 90,000 staff. | |
| In January, staff learned that annual bonuses fell for the third consecutive year to 10% of their annual salary, down from 11% in 2015, 15% in 2014 and 17% in 2013. | In January, staff learned that annual bonuses fell for the third consecutive year to 10% of their annual salary, down from 11% in 2015, 15% in 2014 and 17% in 2013. |
| The deficit in the partnership's pension fund also soared 54% to £1.45bn compared with the figure in January due to low bond yields. | The deficit in the partnership's pension fund also soared 54% to £1.45bn compared with the figure in January due to low bond yields. |
| The British Retail Consortium (BRC) warned earlier this year that rising costs due to the National Living Wage could accelerate job losses in the retail sector. | The British Retail Consortium (BRC) warned earlier this year that rising costs due to the National Living Wage could accelerate job losses in the retail sector. |
| Sir Charlie, who is also BRC chairman, said that while retailers supported the introduction of higher staff pay, there would be an effect on employment. | Sir Charlie, who is also BRC chairman, said that while retailers supported the introduction of higher staff pay, there would be an effect on employment. |
| Next suffers | |
| The UK retail sector employs three million people. That number could fall by nearly a third in less than a decade, the BRC said, as consumers increasingly shop online. | The UK retail sector employs three million people. That number could fall by nearly a third in less than a decade, the BRC said, as consumers increasingly shop online. |
| Next said on Thursday that pre-tax profits fell 1.5% to £342.1m for the six months to July, held back by a 16.8% slide from its retail stores. | |
| Chief executive Lord Wolfson said: "It has been a challenging year so far, with economic and cyclical factors working against us, and it looks set to remain that way until mid-October at the earliest." | |
| The September heatwave has done little to help clothing retailers, he added: "Consumers are only buying clothes when they need to. In this weather, no one's buying winter clothes." | |
| Next repeated a warning first made last month that prices may rise up to 5% next year to offset the sharply weaker pound in a move that could hit sales further. |