Profits at the John Lewis Partnership dropped 99% in first six months of this year to £1.2m.

The John Lewis department stores reported an operating loss of £19.3m. Meanwhile, Waitrose operating profits fell 12% to £96m.

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GlobalData head of retail Maureen Hinton said: “This reflects what is happening in the retail sector – non-food retailers are suffering much more than food retailers.

“We all have to eat but we are being more careful with our discretionary spending.

“Waitrose sales were up and it made a profit, while John Lewis’s sales declined and made a loss, despite the brand opening new stores.”

The Partnership has been trying to differentiate itself from competitors by encouraging millennial shopping with improved technologies like customer tracking and speeded up click & collect.

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It has also relaunched its innovation hub JLAB which is considering launching more events and focusing on themes more relevant to its mostly middle-class customers.

Announcing a profit warning in June, the company revealed plans to continue investing £400-500m a year in product and service innovation.

The company was one of the first to invest in online. Now 40% of its sales are online and 50% of these are click & collect.

Hinton said: “John Lewis is being hit by weaker retailers discounting heavily and it having to price match.”

She said the solution is introducing more own brand and unique products, as the company is doing.

Its differentiated service offer and store upgrades are investments toward future returns, she said.

“However this will take time to produce results and the second half of the year is still going to be highly challenging for the department store.”