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Profits at John Lewis have slumped by 34.4 per cent as homewares sales fell at the department store.

The morbid property market has been a headache for retailers in the DIY and homewares sectors, and high street bellwether John Lewis has been hit over the first half, according to figures released today.

John Lewis Partnership said profit at its department stores reached £40 million over the last six months to July 26th, while Waitrose profit fell 8.4 per cent to £102.7million.

Overall, profit before tax decreased by 27 per cent to £107 million, the Partnership said.

Waitrose, which has grown its sales in recent years on the back of its premium food ranges, is now suffering as value-focussed rivals eat into its market share.

Marks & Spencers has also admitted its high-end food stores have also seen a fall in sales as consumers tighten their belts.

The group said it would be lowering prices in its Waitrose stores in an effort to boost sales.

Waitrose has also capitalised on its position by seeking to persuade people to stay in and eat its food, rather than going to a restaurant. Sales of the grocer's 'As Good as Going Out' range are up 33 per cent.

"The outlook for the coming six months and 2009 remains challenging. However, the John Lewis and Waitrose product and service offers are well differentiated, our Partners are highly committed and with our long-term approach to our business, we are well positioned to take advantage of the recovery in confidence when it comes," said chairman Charlie Mayfield.

The Partnership said it would remain cautious about the outlook for the rest of 2008 and 2009.