Britain's John Lewis Partnership warned it would have to cut staff numbers and scrap any bonus this year after its customers cut back on the amount they were buying, prompting its annual loss to balloon.
The employee-owned company, which runs John Lewis department stores and high-end supermarket Waitrose, also flagged an uncertain outlook as customers struggle with double-digit inflation, prompting some to switch to cheaper outlets.
Sharon White, who chairs the partnership, said the cost-cutting measures were a massive regret to her personally.
"As we need to become more efficient and productive, that will have an impact on our number of partners," White said, referring to the official term for John Lewis Partnership staff.
It reported a loss of £234 million (€265.7 million) in the 12 months to 28 January compared to a loss of £27 million (€30.7 million) in the year before, which it said was largely due to property write downs.
The loss before exceptional items and tax was £78 million (€88.6 million), compared to a profit of £181 million (€205.5 million) in the same period the year before, due to inflationary pressure.
Challenges
The retail group has buckled under the pressure of tough competition, uncertain economic conditions and the costs of developing its online offering in recent years.
White - in the middle of a five-year recovery plan - on Wednesday appointed Nish Kankiwala as the first ever chief executive to help turnaround the company's fortunes.
Total sales were down 2% to £12.3 billion (€14 billion) but John Lewis sales rose by 0.2% to £4.9 billion (€5.6 billion).
However, sales in Waitrose slipped 3% to £7.31 billion (€8.3 billion).
Susannah Streeter said shoppers were buying less and decamping to cheaper stores as they rein in discretionary spending.
"Waitrose ... has been sideswiped by the trend, with essentials rather than treats a priority," Streeter said.
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