John Lewis has recorded positive Christmas trading results, but warned that increased competition and higher costs will cut margins and its full-year profit.
Gross sales at the John Lewis Partnership were up 2.5% versus last year to £1.96 billion, while John Lewis gross sales climbed 3.6% on last year and 3.1% on a like-for-like basis.
The retailer said John Lewis “significantly outperformed the market” by 4.5%, despite the “challenging, highly promotional trading environment”.
Black Friday was John Lewis’s most successful sales day in its history and contributed to the biggest ever week of sales, up 7.2% year-on-year.
But chairman Sir Charlie Mayfield warned that competitive intensity will continue into 2018/19.
“The pressure on margin seen in the first half of the year has intensified because of our choice to maintain competitive prices, despite higher costs mainly due to the weaker exchange rate. This will negatively affect full-year financial results as indicated previously,” he said.
“Looking ahead to 2018/19 we expect trading to be volatile due to the economic environment and anticipate that competitive intensity will continue, driven by the structural changes taking place in the retail industry. We are well placed to continue building the strength of our two leading brands through these changes and will maintain our current investment plans. Our focus continues to be offering our customers the best range of products and the best value, supported by a market leading service.”