John Lewis says pensions to hit profits

The staff-owned John Lewis Partnership has warned pension costs will hit its profits this year.

The owner of John Lewis and Waitrose said first half profits fell 26% to £96m, mainly because of higher pensions charges and some property sales in the comparable period last year.

It warned that in the full year, higher pension charges were likely to be between £270m and £320m, down from £342.7m last year.

John Lewis' pension deficit is £1.15bn.

Like-for-like sales, which exclude the effect of new store space, fell 1.3% at its Waitrose supermarkets, which was offset by 3.0% growth in sales at the department stores.

It was the first fall in sales at Waitrose for seven years.

Chairman Sir Charlie Mayfield said: "At a trading level our profits were broadly level with last year, despite the turmoil in the grocery market.

"That reflects tight management of costs and the steps we have taken to strengthen the appeal of our trading brands, where we have seen an encouraging increase in the number of customers shopping with us."

Customer numbers were up 7% at Waitrose and 6% at John Lewis.