John Lewis stores feel the heat

IT WAS a tale of two summers for the John Lewis Partnership, with shoppers deserting the department stores and flocking to its Waitrose food chain to stock up on salads and soft drinks.

First-half profits at the group, which is owned by its employees or 'partners', advanced 3% to £95.3m before tax and pensions, on turnover 7% ahead at £2.3bn. At pre-tax level, profits surged by 24% to £42.2m as the group benefited from reduced losses at its associate Ocado home delivery service and interest on a tax credit.

Chairman Sir Stuart Hampson said it had been a 'roller-coaster ride' for the department stores, which have just embarked on their first-ever national television advertising campaign. The succession of sunny weekends hit sales hard, and the flagship Oxford Street store was also badly affected by London's congestion charge and the closure of the London Underground Central line..

Total department store sales rose 2% to just over £1bn, but Oxford Street was down 7.5%, after a 1.5% rise in the previous six months. There was a strong performance from the revamped Peter Jones in Sloane Square, however, with sales up 11%.

For the group as a whole, Sir Stuart says he is encouraged the profits recovery is on track but cautions that, as usual, the performance over the Christmas period will be crucial against the background of uncertain consumer spending prospects.