John Lewis blames its ‘Never Knowingly Undersold’ promise for 99% profits slide as it struggles to match rivals’ massive discounts
The department store's policy promises to match lower prices set by other retailers
THE John Lewis Partnership has blamed its Never Knowingly Undersold price match promise for a 99 per cent slump in profits over the first half of the year.
The retail group, which owns Waitrose supermarket, also put the dramatic drop in sales down to "challenging times" for the high street.
The "Never Knowingly Undersold" policy promises to match low prices set by other retailers on the same products.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said that it had "seen an unprecedented level of price matching" because other retailers have "discounted heavily".
Today's report details the company's finances, and said that profit before tax and exceptional items came in at £1.2million - down £95million on the same period last year.
The retailer - which rebranded its stores to John Lewis & Partners and Waitrose & Partners last week - also believes profits for the full year would be down.
The retailer did not specify any plans to close stores or put jobs at risk.
He added: "With the level of uncertainty facing consumers and the economy, in part due to ongoing Brexit negotiations, forecasting is particularly difficult but we continue to expect full-year profits to be substantially lower than last year for the Partnership as a whole."
The trading update comes after reports that department store Debenhams called in advisers to help save the struggling chain.
The embattled department store chain is fighting to keep its 240 stores open following a sharp fall in profits and tumbling share prices as consumers turn to online shopping.
Its troubles come just a month after House of Fraser, another staple UK department store chain, collapsed into administration, before being bought out by Sports Direct owner Mike Ashley.
Sir Mayfield said of John Lewis: "We're continuing to improve our offer for customers while ensuring we have the financial strength to continue developing our business going forward.
"This is reflected in both brands continuing to grow sales and customer numbers, and our total net debts reducing."
Earlier this year, two of the country's largest retailers, Toys R Us and Maplin collapsed putting thousands of jobs at risk.
Last month, Mothercare announced it will shut 60 stores, leading to the loss of hundreds of jobs.
It follows similar moves taken by New Look and Carpetright, which are expected to close 60 and 92 stores respectively, putting hundreds of jobs at risk.
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