John Lewis issues profit warning as it quickens pace of strategic review

Retail giant John Lewis has issued a profit warning after saying it was selling “more Scrabble than sofas”.

The firm said that trading was down 17% since the middle of March as the coronavirus crisis brought store closures.

Despite this, the firm’s Waitrose brand has has seen strong sales growth up 8% year-on-year since 26 January. Items in highest demand have been cupboard essentials like rice, pasta, long life milk; home baking; frozen foods and cleaning products. Sales have increased in both shops and online.

John Lewis said it was looking at a worst case scenario of sales dropping by 35% for its full year.

The company also confirmed that it had furloughed 12,000 staff, and that its executive team, non-executive directors independent directors and chairman Sharon White have taken a 20% cut in pay from April, initially for three months.

In a statement, White said: “I announced in March that we will be undertaking a strategic review of the Partnership, to strengthen our core retail business and develop new services outside retail. The review will now be accelerated and will be substantially complete by the summer. It will seek to take account of changes in consumer behaviour to come out of the pandemic, such as a more pronounced shift to online and a desire to shop in more sustainable ways.”