Profits at the John Lewis Partnership have plunged 99 per cent as it struggled in “the most promotional market in almost a decade” (The Times (£), Sky News). UK retail stalwart John Lewis has warned margins are under pressure from the fiercest discounting across the sector in a decade (The Financial Times £).

The John Lewis Partnership has been hit by the fight for survival on the high street after heavy discounting by struggling rivals helped trigger a 99% fall in first-half profits at the retailer (The Guardian). The John Lewis Partnership is facing pressure to overhaul its ‘never knowingly undersold’ price pledge after discounting from rivals helped wipe out profits (The Telegraph). Profits at the John Lewis Partnership have fallen to almost zero in the first half of the year as its department store chain matched discounting “extravaganza days” by rivals (The BBC).

‘Never knowingly undersold’ has cost John Lewis dear, reads an analysis in The Times (£). Margins at retail chain suffered as it matched rivals’ big discounts while spending on IT. It also notes Waitrose also suffered a fall in profits — down more than 12 per cent in the first half – despite a recovery in like for like sales. (The Times £)

The Telegraph (£) looks at “where it all went wrong for John Lewis, while The Guardian ponders five reasons why John Lewis’ profits have dived and The Mail asks how the UK’s High Street darling has had nearly all of its profits wiped out in just a year.

The Mail’s Alex Brummer writes: “Sticking the word ‘partners’ all over the fascia may be a gee-whizz marketing device engineered by managing director Paula Nickolds, but fundamental changes in the store footprint and service look urgent. If chairman Sir Charlie Mayfield and Nickolds can’t deliver better returns there will need to be change at the very top.” (The Daily Mail)

The FT’s Lombard column argues it is too soon to mourn retail empire’s decline and fall, noting its customer numbers are back in growth. “Unlike Debenhams, House of Fraser and other cadaverous store chains, John Lewis is continuing to grow both its sales and customer numbers, and its balance sheet is strengthening.” (The Financial Times £)

The Guardian’s Nils Pratley also argues that John Lewis is far from in a flap, despite these lousy figures, noting that today’s woes look tame compared to the mess it was in back in the 1990s. Management may have been slow to spot trouble – the 1,800 redundancies in the last 12 months look a little rushed – but the Waitrose half of the operation is stable. (The Guardian)

Morrisons has reported its strongest quarterly growth in nine years and unveiled a second special dividend payment as it continues to “make a good fist” of its turnaround (The Times £). Morrisons has served up its best quarterly sales growth in almost a decade thanks to brisk trading during the World Cup and a summer heatwave, while also rewarding its investors with a special dividend (The Financial Times £). Morrisons heralded its best sales growth in almost a decade as customers flocked to snap up British produce (The Daily Mail).

Morrisons’ burgeoning wholesale business is to take a bold step into foreign climes with a deal to supply Thailand’s Big C grocery store chain with a range of 100 of its own-branded products (The Telegraph). Morrisons is to launch its own vegan ready meals late next month as it tries to tap into the growing trend for shunning meat and animal products (The Guardian). Morrisons is dishing out £91million to its shareholders after seeing sales in the second quarter rise to a nine-year high (The Daily Mail)

The Mail’s Alex Brummer contrasts Morrisons’ recovery with the struggles of John Lewis: “Most of the uplift was due to shrewd management, including a focus on fresh food counters, private label and homewares. Morrisons also has been rewarded for embracing online by agreeing distribution deals with Ocado and Amazon.” (The Daily Mail)

The FT’s Lex column cautions that “too often in the mirror world of UK supermarkets, sales are sanity and cash flow is profanity”. IT notes Morrisons’ 4.9% like for like growth contrasts , with free cash flow, which fell by a third to £220m, with a hefty increase in dividends to £198m making a big dent in that number. (The Financial Times £)

German retail group Metro AG said it wants to put its supermarket chain Real up for sale, in a move that will focus the former retail conglomerate entirely on its wholesale activities. (The Financial Times £)

More than 40 experts have written to the government’s public health agency to oppose its tie-up with a charity funded by the alcohol industry for the Drink Free Days campaign. (The Guardian)

The second-largest food retailer in the US, Kroger, reported sales growth that missed Wall Street expectations and a quarterly drop in margins, helping send shares more than 8 per cent lower in pre-market trading on Thursday. (The Financial Times £)

Walmart, the biggest retailer in Mexico, is beefing up its e-commerce business with a deal to buy Cornershop, a fast-growing online grocery app focused on Mexico and Chile, ramping up competition with Amazon which has recently launched a food and drinks delivery service in Mexico. (The Financial Times £)

 

 

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