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John Lewis Partnership reports solid rise in Christmas sales, but says margin pressure has intensified

In a trading statement for the for six weeks ending 30 December 2017, the employee-owned group – which also runs the Waitrose supermarket chain - said gross sales rose by 2.5% to £1.96bn compared to the same period in 2016
John Lewis stores
However, Charlie Mayfield, the John Lewis Partnership’s chairman, said: "The pressure on margin seen in the first half of the year has intensified"

Eponymous department stores group owner John Lewis Partnership has reported a solid rise in Christmas sales although its boss said margin pressure has intensified, which will impact full year results, and he expects volatile trading to continue over the next twelve months.

In a trading statement for the for six weeks ending 30 December 2017, the employee-owned group – which also runs the Waitrose supermarket chain - said gross sales rose by 2.5% to £1.96bn compared to the same period in 2016.

READ: Tesco follows Sainsbury’s and reports record Christmas driven by strong food sales

The group said Waitrose’s gross sales, excluding fuel, were £928mln, up 1.4% versus last year and up 1.5% on a like-for-like basis.

However, unlike last year's trading update, it added, the numbers exclude New Year's Eve, and if that was included Waitrose’s like-for-like sales would be up an estimated 2.2%

Meanwhile, gross sales at the John Lewis chain were £1,034mln in the period, up 3.6% versus last year and ahead 3.1% on a like-for-like basis, significantly outperforming the market by 4.5%.

The group said ‘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.

READ: M&S unveils drop in UK food and clothing sales over Christmas

However, Charlie Mayfield, the John Lewis Partnership’s chairman, said: "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 added: “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.”

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