Following costs hit the retail group to reorganise the business John Lewis Partnership gains have dropped by over 50%.
Profit before tax dropped 53.3% to #26.6m to the half-year ending 29 July following a #56.4m fee mainly for restructuring and redundancy costs.
In the John Lewis department store profits rose by 10%.
As its margin was eaten into by higher prices but at Waitrose operating profits fell 18 percent.
“Look, nobody should be surprised that this is a tough market for retailers. There is any number of reasons for this,” John Lewis Partnership chairman Sir Charlie Mayfield told the BBC.
“The reason our profits are down is mainly because of margin, and price prices are rising. It’s a really competitive market, retail prices aren’t rising as quickly.”
Inflation is currently pushing prices up for John Lewis Partnership, but the retailer is choosing to absorb those prices that were higher, Sir Charlie said.
John Lewis can afford to continue to do this “for some time”, he said, because of the group’s healthy cash reserves.
He stated that money spent on reorganising the business, which ate into profits, was an investment that was important.
“We have not… hunkered down in a difficult market. Instead what we’ve done is we have pressed on with some really important changes that are going to make the business fit for the future,” he said.
“While it’s been a difficult first-half, our sales have still been up, our profits are down, but we have made some really significant progress for the future,” Sir Charlie added.