Losses widen at John Lewis Partnership after Budget tax increases

The John Lewis Partnership (JLP) has posted an £88 million loss for the past half-year after being hit by increases to national insurance contributions and packaging taxes.

However, the employee-owned group, which runs the John Lewis department store chain and Waitrose grocery business, said it is still “well positioned” to deliver profit growth for the full year.

It said pre-tax losses before exceptional items grew to £34 million for the 26 weeks to 26 July.

However, it saw this grow to an £88 million pre-tax loss after exceptional costs linked to the company’s ongoing turnaround programme and non-cash impairments were taken into account. This compared with a £30 million loss a year earlier.

JLP said this included a £29 million impact from the Extended Producer Responsibility (EPR) packaging and higher national insurance payments, after they were introduced in April following last year’s autumn Budget.

The group also said its profitability was dragged down by its significant investment plan.

It said its investments in technology, supply chains and stores have helped drive stronger sales momentum over the half-year and increased customer numbers.

JLP said it expected continued sales growth to support stronger profits in the second half of the year despite “challenging” wider economic conditions.

Jason Tarry, who took over a Chairman of the group a year ago, said that the group’s profits are heavily weighted to the second half of the year, which include the key Christmas trading period.

He added: “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.

“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.”