John Lewis Chair warns weaker sales and rising costs will squeeze profits

John Lewis Partnership Chair Jason Tarry has warned employees that weaker sales and higher-than-expected costs are putting pressure on profits across John Lewis and Waitrose.

The comments reinforce the cautious outlook set out in the partnership’s annual results in March.

Although sales grew during the year to 31 January 2026, statutory performance was affected by staff bonuses and exceptional costs.

Tarry is responding with tighter commercial discipline while continuing to invest in stores and digital infrastructure across both retail brands.

According to the Financial Times, he told the company’s in-house magazine that trading had become more difficult than expected six months ago.

The former Tesco UK and Ireland Chief Executive, who became John Lewis Partnership chair in September 2024, said conditions were “really tough”. The group is facing weaker sales and higher costs, making it more important to protect margins and control stock levels.

Consumer caution remains central to the outlook. Tarry previously said: “There’s no doubt that consumer confidence is subdued.” He also stressed the importance of seasonal trading, adding: “We are a second-half business, no doubt about that. All of our profit is in the second half.”

The comments come after the partnership reported sales of £13.4 billion, up 5%, for the year to 31 January 2026. Waitrose sales increased 7% to £8.5 billion, while John Lewis department store sales rose 3% to £4.9 billion.

The partnership also restored its annual staff bonus after a four-year gap, awarding employees, known as partners, a bonus equivalent to 2% of salary.

Earlier cost pressures included increases in employer National Insurance contributions and Extended Producer Responsibility packaging charges. During the first half of the previous financial year, those measures cost the partnership £29 million, while restructuring and technology modernisation generated further expenses.

Since taking on the Chair role, Tarry has focused investment on Waitrose and John Lewis while ending the partnership’s rental homes project. Spending priorities include new Waitrose stores, refurbished shops, upgraded digital platforms and supply chain improvements.

The group invested £191 million in refurbishments and other initiatives, including the restoration of John Lewis’s “Never Knowingly Undersold” price pledge. It has also expanded its fashion offering, with Topshop introduced in 32 John Lewis stores from February 2026.

The partnership is expected to publish its half-year results on 10 September.