Sales of home technology products and electrical goods are on the rise at John Lewis, despite an overall profit slump at the retailer.
In total, profit at John Lewis declined by 77 per cent over to £103.9 million in the year to the end of January. However figures remain strong within its technology unit, which saw a 2.6 per cent annual rise.
Much of the damage to the bottom line was the result of one-off charges to cover redundancy and restructuring costs. But excluding those one-off costs, profit was still down 22 per cent to £289 million. As a result, bonuses for 84,000 staff at John Lewis and Waitrose will be cut for the fifth year in a row. Employees will get a 5 per cent bonus, down from 6 per cent last year and the lowest since the 4 per cent paid out in 1954.
John Lewis Partnership chairman Sir Charlie Mayfield said the last year had been ‘challenging’, with ‘subdued’ consumer demand resulting from changing consumer habits combined with the weaker pound. "We expect trading to be volatile in 2018-19, with continuing economic uncertainty and no let up in competitive intensity. We therefore anticipate further pressure on profits," the company said.
While the bottom line took a significant, there were areas of growth within the business. Market share increased within fashion, electrical goods and home technology, with sales in the latter category up by 2.6 per cent. Fashion sales climbed 3.2 per cent, boosted by a strong performance in womenswear, up 5 per cent.
"These results show that conditions of the High Street are very tricky at the moment," Richard Lim, chief executive of analysts Retail Economics, said."Consumer spending generally is a lot softer, while inflation is still near a five-year high. People’s personal finances are under pressure."