John Lewis profits could be ‘close to zero’

John Lewis has issued another profit warning and admitted that it expects profits before exceptional items to be “substantially lower” than last year, or even “close to zero”.

The retailer also outlined the next phase of its strategy, saying it would focus on “differentiation not scale”, maintaining a higher level of investment in product and service innovation and continuing to invest at a rate of £400m-£500m per year.

It said it expected to see profit growth in Waitrose and a decline in John Lewis. The retailer also announced the closure of four Waitrose convenience shops and one small supermarket.

Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: “[We are] a unique business with different ownership, a different purpose and a different outlook to any of our competitors. As retail changes we need to tread a path that enables us to thrive as a business while building on the qualities that make us different.

“For us, the relentless pursuit of greater scale is not the right course. Our plans put differentiation, innovation and Partner led service at the heart of our offer. The measures that we have outlined today are an important next step in our strategy that will ensure we emerge stronger from this period of profound change.”