UK (Parliament Politics Magazine) – John Lewis Partnership’s losses tripled to £88m from restructuring, tax, and packaging costs, though rising sales fuel hopes of full-year profit growth.
As reported by The Guardian, John Lewis and Waitrose posted £88m losses in the first half, driven by business restructuring and new tax and regulatory charges.
How John Lewis and Waitrose posted £88m losses despite rising sales?
John Lewis collaboration, which runs 36 department stores and over 300 Waitrose outlets, reported £29m in costs from packaging regulations and national insurance, alongside £54m in restructuring expenses.
The employee-owned group’s pre-tax losses nearly tripled from last year’s £30m, even as sales rose 4% to £6.2bn in the six months to 26 July.
The group warned the macroeconomic environment would remain difficult but said it is boosting investment to ensure full-year profit growth.
The partnership said the investment is essential to accelerate growth, explaining,
“While this impacts profitability in the short term, it is a foundational part of our strategy for the benefit of our customers and Partners. Our strong cash generation and liquidity, combined with our ability to take a long-term perspective, enables us to make these crucial investments to support our growth in the second half and for years to come.”
Waitrose sales climbed 6% to £4.1bn, while John Lewis department stores grew 2% to £2.1bn, with the partnership claiming it outperformed amid economic uncertainty.
Both partners invested £191m in store revamps and initiatives, including reinstating the “never knowingly undersold” pledge, adjusting staff hours, and hiring extra brand-funded workers to improve customer service.
JLP also revealed plans to host Topshop in 32 stores from February, serving as the UK’s only national high-street stockist, aiming to attract younger shoppers and their mothers.
Topshop, now part of Asos, runs only one UK physical store, located in the Liberty department store, central London.
What did Jason Tarry say about full-year profit growth?
Jason Tarry, head of the partnership, said the group is on track for full-year profit growth.
He stated,
“Our clear focus on accelerating investment in our customers and our brands is working: more customers are shopping with us, driving sales, and helping Waitrose and John Lewis outperform their markets. We achieved our highest recorded levels of positive customer satisfaction, a testament to the great service of our Partners.”
Mr Tarry added,
“The investments we are making, combined with our plans for peak trading, provide a strong foundation for the remainder of the year. While we are reporting a loss in the first half, we’re well positioned to deliver full-year profit growth, which we’ll continue to invest in our customers and Partners.”
Key facts about John Lewis and Waitrose sales
Waitrose sales rose 4.4% to £8bn, while John Lewis remained at £4.8bn, with total Partnership sales up 3% to £12.8bn. Pre-tax profit tripled to £126m, and operating margin reached 2%.
It was established in 1904 and joined the John Lewis Partnership in 1937. The Partnership is Britain’s largest employee-owned business, with all staff called “Partners” sharing in the profits.
Who owns the UK’s top department stores?
- John Lewis – Owned by John Lewis Partnership
- Marks & Spencer (M&S) – Publicly traded company
- Debenhams – Owned by Boohoo Group (online-focused)
- Harrods – Owned by Qatar Investment Authority
- Selfridges – Owned by Central Group and Signa Holding