John Lewis chair warns inflation is ‘hitting top line’ as spending falls

The chair of John Lewis has warned that inflation is “hitting the top line”, with the group witnessing a notable shift in consumer habits amid the cost of living crisis, as more people are budgeting and deferring big purchases.

Speaking at the CBI’s annual conference, Dame Sharon White said: “This is the first Christmas for three years that people get to spend with family, friends and loved ones, and I think people will be really excited to have a proper Christmas. But you can see all sorts of things going on with consumer spending.

“We have got some customers who are doing their shopping early and have booked their Waitrose delivery slots in advance. On the other hand, you can see other customers starting to budget, and shopping is more phased.”

She noted that customers were buying more own-brand, value ranges, and buying fewer branded products, whilst also “shopping a bit less online and going more into stores in order to enjoy that shopping trip experience”.

White then warned that “for us, inflation is hitting the top line”. She said that while customers are still spending, they are “being much more thoughtful and intentional about how they are spending”.

She said: “So we have the same number of customers, but they might be putting one or two fewer things in their basket. They might be deferring that sofa purchase until next year, until we see what is going to happen in the housing market. And people could be thinking, do I need that today, or can it wait to see how the next two or three months go?”

When asked if the firm’s partners would receive a bonus this year, White said: “It is going to be tough, and I think our partners know it is going to be tough. Many of us are facing some big choices. Retail is not a high wage sector. You have got to weigh up those costs with the business being financially healthy.”