David Prosser: Mayfield counts the cost of a promise John Lewis made 80 years ago

Outlook Were Charlie Mayfield, the chairman of John Lewis, to be in charge of a stock market-listed company that had just posted a near-20 per cent decline in profits, he would be in for some sleepless nights. Shareholders do not take that sort of performance terribly well.

Happily for Mr Mayfield, John Lewis is owned, famously, by its employees. These are stakeholders who do not have the platform a stock market listing provides for disgruntled investors to make their feelings known – or, to be fair, the same sort of time horizons for judging performance.

That is in many ways a good thing. At other companies, Mr Mayfield would have found it tough to invest so heavily during the first half, a period of such economic uncertainty, despite the consensus amongst retail specialists that overhauls and openings at both the department store arm of John Lewis and Waitrose, its upmarket grocer, will pay dividends.

Still, the other reason for the 18 per cent collapse in profits Mr Mayfield had to reveal yesterday deserves some thought. In an ever- more competitive price environment on the high street, the John Lewis' "never knowingly undersold" policy has become increasingly damaging to margins.

The price promise, launched in 1925, is one of the cornerstones of John Lewis's department store business, though some smallprint has had to be added with the advent of competition from online-only operators (there is no guarantee of price matching with them). But it sometimes feels like an odd thing to find at what has become an upmarket business.

No chief executive is ever going to say that quality and value are mutually exclusive, but it is still unusual to find a retailer that so visibly attempts to compete on both simultaneously.

That is not to say that it is time to ditch "never knowingly undersold", particularly since to do so would be such a huge shift after 86 years. But at a time when shoppers feel the need to watch the pennies so closely and have the option of doing so, courtesy of the internet, more easily than ever before, the promise is going to carry on costing John Lewis dearly.

Finally, it is worth saying that it is not impossible to plan for the future while also satisfying stock market investors. Compare the results of John Lewis to those of Next, which were also issued yesterday, for proof of that. Given the consistency with which Next has surprised investors on the upside, there can be no arguing it is sacrificing long-term performance at the altar of the market.