John Lewis sales up 2.5 per cent in first half

Never Knowingly Undersold commitment and competitive trading hits profits.
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Gross sales for the first half were up 2.5 per cent at £1.42bn and like-for-like sales increased by one per cent. Operating profit fell by 54.5 per cent to £15.8m.

The retailer said profits were impacted by its commitment to ‘Never Knowingly Undersold’ as well as a highly competitive trading environment. The firm said it will continue its strategy to grow the business efficiently and invest for the long term.

Multichannel and online selling have been 'at the heart' of John Lewis' performance in the first half of the year, with the website growing by 27.2 per cent. This growth is due to a number of factors, including expansion of the product offering online and investment in the development of the Click and Collect option.

Due to the popularity of the Click and Collect option, John Lewis is more than doubling the number of outlet collection points to 116, with more being planned.

Johnlewis.com accounts for 19 per cent of total John Lewis sales and the retailer expects the site to be achieving sales of £1bn by 2014. This will be bolstered by the new online international operation, which began delivering abroad in June and is now live in 33 countries.

Chairman, Charlie Mayfield, commented: "The Partnership has made good progress in the first half. Sales grew strongly and, as expected, profits were lower than in the same period in 2010 as we accelerated investment in our growth plans. Our capital expenditure increased by £99m to £254m in the first half.

"In the face of increasing pressure on household budgets we increased our focus on offering value across all our ranges. In John Lewis, ‘Never Knowingly Undersold’ meant we met our promise to offer the best value both on the high street and online compared to ‘bricks and mortar’ competitors."

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