The owner of John Lewis and Waitrose has reported a 75% fall in half-year profits to £56.9m.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said the fall reflects “market conditions” and “steps we are taking to adapt the Partnership for the future”.
The slump in profits for the six months to 30 July includes a £25m charge for the write-off of sites it no longer intends to develop, following a strategic review.
It compares to a period last year when the Partnership made a one-off gain of £128m from a profit sale.
Even stripping these out, profits for the latest half-year were down by 15%, blamed on “deep structural changes in the retail market”.
“Our commitment to competitive pricing, excellent service, increasing pay and investing for the long term have held back profits,” Sir Charlie said.
He added that the changes in market conditions it faced were not as a consequence of the EU referendum, which he said “had little quantifiable impact on sales so far”.
“Instead there are far reaching changes taking place in society, in retail and in the workplace that have much greater implications,” he said.
The partnership operates in a sector facing major upheaval.
Supermarkets such as Waitrose are having to keep a lid on prices thanks to the threat from discounters Aldi and Lidl.
Meanwhile John Lewis faces tough competition in the clothing market and is also dealing with a major shift to online sales.
The latest half-year results showed a 1% fall in like-for-like sales at Waitrose and a 3.1% sales rise at John Lewis.
Overall sales at the group totalled £5.3bn, with about three-fifths of that from Waitrose.
Current trading has been a bit better for the supermarket, with like-for-like sales up 1.4% in the six weeks since the end of the half-year – covering a period after the Brexit vote.
But sales growth has slowed at John Lewis, to 0.7%.
The John Lewis Partnership operates 46 John Lewis stores across the UK as well as 349 Waitrose shops, and online outlets for both brands.
It is the UK’s biggest employee-owned business, with all its 89,000 staff being partners.