John Lewis Partnership has reported profit fell 26% last year and has warned that 2009 will be another difficult trading year.
Profit before exceptional items fell to £279.6m on a drop in like for like sales at its John Lewis department stores and price-cuts at its Waitrose stores.
High street bellwether John Lewis, which last month awarded its £20m advertising account to Adam and Eve, saw sales slump 3.4% as customers cut back on home-related goods in the wake of the housing collapse.
Waitrose, which this week introduced a new 1,450-strong range of value products to counter any drift to discount retailers, saw like for like growth, excluding petrol, of 0.4%.
The Partnership says the number of price promotions and reductions at Waitrose stores increased by 25% to 8,400 last year with a total value of £30m.
Charlie Mayfield, chairman of John Lewis Partnership, says though this year will be tough it has set an “ambitious pace for change and continue to have the opportunity and funds to expand and enhance our offer”.