John Lewis Losses Soar to £88m Amid Rising Costs and Weak Consumer Confidence
The John Lewis Partnership has reported a sharp rise in half-year losses, nearly tripling to £88 million as the company battles soaring costs and sluggish consumer spending.
The employee-owned group, which operates John Lewis department stores and Waitrose supermarkets, said pre-tax losses before exceptional items rose from £30 million a year earlier to £88 million in the six months to 26 July. The increase was driven by higher National Insurance Contributions (NICs) and costs linked to the government’s new Extended Producer Responsibility (EPR) scheme, which shifts the burden of waste packaging management from local councils to retailers and producers.
The group spent £29 million on these two areas alone, with the costs split evenly between packaging levies and employer NIC payments. The Bank of England has previously warned that the EPR levy could add up to 0.5% to food prices if fully passed on to consumers.
John Lewis Partnership chair Jason Tarry said consumer sentiment remained fragile ahead of the UK Budget expected in November.
“There’s no doubt that consumer confidence is subdued,” Tarry said. “We’ll focus on what we can control.”
Despite the poor first-half performance, Tarry expressed optimism for a strong turnaround during the second half of the year, fuelled by the crucial Christmas trading period.
“We are a second-half business – all of our profit is in the second half,” he explained, adding that the company anticipates high demand for festive products such as wearable technology and Jellycat soft toys.
Waitrose posted a 6% rise in sales to £4.1 billion, as shoppers continued to treat themselves despite economic pressures. Across the partnership, total revenue rose by 4% to £6.2 billion.
John Lewis staff have not received an annual bonus for three years, but Tarry said the company remains committed to reinstating payments as soon as possible.
“It’s far too early in the year to say when that will happen,” he cautioned.
The retailer has been working to regain market share following the pandemic and growing competition from rivals. Last year, it reinstated its iconic “Never Knowingly Undersold” price promise, two years after scrapping it, in a bid to strengthen its value proposition.
Zoe Mills, lead analyst at GlobalData, said the strategy had given John Lewis a “competitive edge,” noting that knowledgeable staff offering expert advice in areas such as electronics and cosmetics could continue to attract loyal customers.
With Christmas around the corner, the group is pinning its hopes on festive sales to reverse its fortunes and deliver growth in full-year profits.
