High street retailer John Lewis has blamed higher salaries and increasing competition for its profit slump in the six months to 30 July, amid what it described as "far-reaching" changes in the industry.
In the half year to the end of July, the partnership posted a 14.8% year-on-year decline in pre-tax profits to £82.4m ($109.1m), excluding a charge of £25m on property assets. The group recorded an increase in market share and total gross sales, but like-for-like sales figures painted a mixed picture.
Same store sales at John Lewis rose 3.1% from the corresponding period in the year before, while they fell 1% at Waitrose supermarkets.
Group chairman Sir Charlie Mayfield said Britain's vote to leave the European Union had not had an impact on sales so far, but he blamed "competitive pricing, excellent service, increasing pay and investing for the long term" for the sharp drop in profits.
"There are far reaching changes taking place in society, in retail and in the workplace that have much greater implications," he said. "Our ownership structure makes it especially important that we manage the partnership carefully and thoughtfully for the long term and our plans anticipate the impact of these bigger changes."
Mayfield added the decline in profit reflected the general conditions in the industry, though he reiterated John Lewis was taking steps to adapt itself to the forecast trading environment.