The John Lewis Partnership (JLP) is targeting cost savings of £300m a year by 2022-23 after reporting losses of £517m.
JLP said “buying efficiencies” would contribute £85m to the savings target and “cost-out activities” a further £170m.
In its latest results for the year to 30 January the retailer said it was also in the process of reducing the cost of its head office by 20%, which included “restructuring of the partnership’s technology”.
“Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store. Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown, which will also have implications for our supply chain,” said Sharon White, JLP chairman.
The company said before the pandemic shops contributed around £6 of every £10 spend online “but we now think that figure is £3”.
JLP said technology including TVs, computers and games consoles and exercise equipment had sold well in John Lewis, while fashion and cosmetics were down.
In Waitrose sales of fresh food, beers, wine and spirits were up, while sales of sandwiches, takeaway salads and pre-packed cakes fell.
The pandemic added direct costs of around £40m around personal protective equipment, security, testing, and screens.
JLP said it had seen “limited impact from Brexit so far operationally owing to our advance preparations and the Brexit trade deal.
“The one area of the business that is temporarily disrupted is deliveries to Northern Ireland and we expect to resume these before the summer.”
White said: “We are going through the greatest scale of change in the partnership’s 156-year history. Difficult decisions taken now will hopefully set the course for those next generations.”
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