The John Lewis Partnership, owner of John Lewis department stores and Waitrose supermarkets, reported widening pre-tax losses of £124 million for the six months ending August 1, up from £88 million in the same period the previous year. Excluding exceptional costs, the loss before tax stood at £89 million, compared with £34 million a year earlier. Despite these losses, overall sales increased 2 percent to £6.3 billion, supported by a 4 percent rise in Waitrose supermarket sales, while the John Lewis department stores saw a 2 percent decline in revenue.

Chairman Jason Tarry cited a combination of factors contributing to the financial setback, including elevated operating costs, such as the £25 billion increase in National Insurance Contributions for employers, inflationary pressures, and the costs associated with managing a succession of summer heatwaves. He also pointed to consumer caution amid wider economic and geopolitical uncertainties, including the war in Iran, which have affected spending, especially on higher-value items like furniture and electrical goods.

Waitrose's performance remained relatively strong, driven by good sales momentum, although challenges related to the heatwaves—impacting refrigeration and freezing—were noted, prompting ongoing investment in more resilient equipment. In contrast, the department store arm continued to struggle with subdued demand for big-ticket, discretionary purchases in a competitive retail environment.

The partnership is in the midst of a turnaround plan launched under Tarry’s leadership since September 2024, marked by a focus on core retail activities following the abandonment of a previous build-to-rent housing venture. The company has also invested heavily in refurbishing stores, introducing trendier product ranges, and expanding in-store amenities such as beauty halls and sports brands. These investments, amounting to approximately £800 million, have increased costs but are part of a long-term strategy to revive the department store chain and improve customer satisfaction.

The group has also made changes in management, with Will Kernan, a former River Island executive, appointed head of the John Lewis department store business following the departure of Peter Ruis. Despite the losses, the partnership awarded a staff bonus earlier in the year, marking the first bonus payment in four years, although it remains unclear whether this will be repeated.

The partnership urged the UK government to reform business rates, describing them as the largest single business tax they face, with some locations paying more in business rates than rent. Tarry emphasized the role of John Lewis and Waitrose stores as key destinations that drive foot traffic to local high streets and cautioned against policies that might increase costs on larger anchor stores.

Looking ahead, the partnership acknowledged a traditionally stronger second half of the financial year, including the critical Christmas trading period, but maintained a cautious outlook due to ongoing inflation, increased wage and tax bills, and uncertainty in consumer confidence. Analysts have noted that John Lewis remains particularly exposed to sectors where consumers are delaying spending, raising questions about the speed and sustainability of the ongoing turnaround.