Sir Charlie Mayfield, the chairman of John Lewis, said uncertainty was being felt throughout the economy and a “serious” parliamentary debate about Brexit was now essential. The John Lewis department store group has blamed Brexit for its profits being slash by more than half amid rising prices and weaker consumer demand.
The grim financial numbers from John Lewis are typical of the gloom among many British businesses as uncertainty continues to hang over the Government’s negotiations with Europe over Brexit.
In an update for the first six months of its financial year, the group, which owns Waitrose supermarkets as well as the John Lewis department store chain, said it expected the tough retail climate to continue throughout this year as UK consumers were less willing to spend money against a backdrop of higher inflation and political uncertainty.
The fourth round of talks between the UK and the EU are due to begin on September 25 but hopes for progress remain slim after the first three rounds ended in acrimony and achieved little.
“Brexit is having an impact on everybody,” he said. “Sterling is weaker and there is evidence to show that confidence is being affected. The issues related to leaving the EU are extremely complicated and we do want to see justice being done to that complexity. There needs to be serious parliamentary debate.”
“There is a very complex negotiation before us and the core principles of that need to be thrashed out in order to increase the chances of a successful conclusion to the negotiation. If not there is a greater risk of a disorderly outcome.”
Mayfield said profits had mainly been hit by a squeeze on margins as tough competition was forcing the company to keep prices down despite rising costs. There was some good news from Mayfield, who said sales had risen in the first few weeks of the second half of the year although he warned that a number of factors would weigh on profits.
In March, when John Lewis announced full-year results for 2016,the bonus for staff was cut to just 6% of salary, the lowest level for more than 60 years and down from 10% the year before. Mayfield said the second half of the year would be crucial to determining the staff bonus for next year, because the business makes two-thirds of profits during the latter half.
Meanwhile, Prime Minister Theresa May has snubbed a personal invitation from Europe’s main Brexit negotiator to attend the European Parliament and explain her Government’s confused policy. Instead a spokesman said she has decided to “make a special speech” in Florence on Tuesday, repeating her often-derided tactic from the last election campaign of avoiding meetings with those who might challenge her. May’s aides say it will be an “important speech and contain many important details.”
Guy Verhofstadt, the European Parliament’s Brexit co-ordinator, said May should have an “open dialogue” with Members of the European Parliament to discuss the issues because the MEPs would ultimately have a vote on whether to accept the final Brexit deal.
May was branded “out of her depth” and in danger of “further weakening the UK’s position” by a prominent Green MEP at the opening of the European Parliament on Tuesday after it emerged that she had refused to attend such a public meeting.
Most British PMs have addressed the Parliament in Strasbourg and May’s critics say she turned down the invitation for fear of a hostile grilling.
European Parliament Green group co-leader Philippe Lamberts had stern words about May’s non-attendance. “The impression I get of her is that she is a lady out of her depth, meaning that she is reaching the very edge of her skills now, and I think it’s starting to show,” he said.
May’s Florence speech is said to be about the “close ties” her aides say she wants the UK to enjoy with the EU beyond Brexit.
by Bob Graham
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