John Lewis blames Labour tax hikes as losses spiral – but boss eyes a bumper Christmas

The John Lewis Partnership has blamed Labour’s tax hikes for losses deepening – but was upbeat about prospects for Christmas.

The department store and Waitrose owner’s pre-tax losses in the six months to July 26 widened to £88million from £30million over the same period last year.

The slump came as it was hit with rising costs in the wake of last year’s Budget, including £29million from a new packaging levy and higher National Insurance Contributions.

The packaging tax, or ‘extended producer responsibility’, has shifted the cost of recycling from councils to companies, hitting food retailers particularly hard.

But despite the costs imposed by Rachel Reeves, the group was bullish about Christmas.

Partnership chairman Jason Tarry said: ‘If we keep doing the right things for customers, things that they want to see, and evolve and improve our propositions, we think that we can continue to progress, particularly going into Christmas – our key time.’

Christmas jitters: John Lewis chairman Jason Tarry (pictured) warned that consumer confidence was fragile ahead of the Budget this November 

Peter Ruis, managing director of the John Lewis arm, said consumers would look ‘to get away from the doom and gloom’.

He added: ‘The general feeling we have is whatever the economy, whatever the external environment, people will come together for a great Christmas.’ 

John Lewis said best-selling toys are likely to include the Uno Spin card game, a wooden air fryer, Scalextric and Lego.

But the employee-owned partnership said it was too early to say whether its 66,000 staff will receive a first bonus in four years.

While losses across the partnership deepened, first-half sales rose 4 per cent to £6.2billion, with Waitrose up 6 per cent to a record £4.1billion and John Lewis 2 per cent higher at £2.1billion.

A former boss of Tesco in the UK, Tarry was hired last year to revive the retailer’s fortunes after years in the doldrums following the pandemic.

The department store chain, which has 36 shops, has benefited since Ruis brought back its ‘never knowingly undersold’ price-matching pledge that was introduced in 1925 but scrapped in 2022.

The business invested £191million in the first half, launching beauty halls across the country.

It is also hoping to lure shoppers away from rivals such as Next and Marks & Spencer with ‘exciting’ fashion lines, Ruis said.

But Tarry warned that consumer confidence was fragile ahead of the Budget this November and urged the Chancellor to make meaningful reforms to the hated business rates system.

He was among those to attend a meeting with Reeves last week and said retailers ‘were pretty clear then that business rates was our number one priority’. 

They are the largest cost after staff pay, he added. John Lewis stands to be one of those firms most negatively affected by proposed reforms to increase taxes on larger properties.

A report by the British Retail Consortium warned that 400 big shops could close as a result – costing 100,000 jobs.

Its chief executive Helen Dickinson said this would result in ‘emptier high streets and less revenue for the Exchequer’.

She added: ‘The Chancellor can back families, jobs and high streets by excluding large shops from the new higher business rates tax band.

‘This would not cost the Exchequer a penny, yet would help secure the future of 400 retail stores, and the communities they support. 

‘But failure to act risks shuttering hundreds more stores, costing jobs, communities and the economy far more in the long run.’

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