The John Lewis Partnership has reported an £88 million loss for the past six months as the employee-owned retailer grappled with government tax increases. The group, which operates the John Lewis department store chain and Waitrose supermarkets, blamed national insurance contribution rises and new packaging taxes for hitting its finances.
Pre-tax losses before exceptional items reached £34 million for the 26 weeks ending July 26. However, when exceptional costs from the company's turnaround programme and non-cash impairments were included, total pre-tax losses ballooned to £88 million, compared with a £30 million loss in the same period last year.
Government policy impact
The retailer said £29 million of its losses stemmed directly from the Extended Producer Responsibility packaging taxes and higher national insurance payments introduced in April following the autumn Budget. These new financial burdens significantly contributed to the widening losses at the retail giant.
The partnership also cited its substantial investment programme as another factor dragging down profitability during the period. The company has been pursuing an ambitious spending plan aimed at improving customer experience and competitiveness.
Management remains optimistic
Chairman Jason Tarry said the retailer's focus on investing in customers and brands was delivering results, with more shoppers choosing both Waitrose and John Lewis. He highlighted that both chains were outperforming their respective markets and achieving record levels of customer satisfaction.
Despite reporting first-half losses, Tarry insisted the partnership remained "well positioned to deliver full-year profit growth". He said the investments being made, combined with plans for the crucial peak trading period, provided a strong foundation for the remainder of the year.
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
