Retailers John Lewis and DFS have said customers are cutting back on the amount they spend due to the rising cost of living.

John Lewis said yesterday that, while shopper numbers were higher than last year, people spending less and avoiding buying as many "big-ticket" items.

"No one could have predicted the scale of the cost-of-living crisis," said John Lewis boss Dame Sharon White.

The company reported losses of £99million for the first half of its trading year.

Sofa retailer DFS Furniture reported slumping annual profits due to a dip in consumer spending, saying order numbers had "softened markedly" as shoppers tightened their belts.

Also on Thursday, fashion chain H&M filed lower-than-expected quarterly sales., but said it had seen a "better start for the autumn collections than last year".

Dame Sharon said customers were less likely to splash out on "big-ticket" household items and were moving their spending to dining out at restaurants and to holidays.

Scale of crisis

"No one could have predicted the scale of the cost-of-living crisis that has materialised, with energy prices and inflation rising ahead of anyone's expectations," she told the BBC.

"As a business, we have faced unprecedented cost inflation across grocery and general merchandise."

However, she said it was "not unusual" for the John Lewis Partnership to report losses in the first half of the year as its trading is "heavily skewed" to Christmas, with most of its profits made in the final months of the year.

In the first half of last year, the partnership reported losses of £29million.

The company said its losses this year were due to a combination of rising wholesale prices for goods not being passed on to customers, households cutting back on spending, and the "unwinding" of Covid shopping habits.

It said it chose to "forgo" profit to help staff and customers through the cost-of-living crisis. The employee-owned group announced a £500 one-off payment to full-time workers, with a pro-rata amount for those working part-time, to support staff.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told the BBC that the "fight is on for consumers' remaining disposable cash".

She said DFS was the "latest" company to warn of the "painful effects" of inflation.

"DFS is not only having to cope with a slowdown due to purchases which were brought forward during the pandemic, but now - as household bills mount for essentials like food and heating - a plush new sofa is a luxury many consumers are happy to do without," she added.

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