John Lewis and Waitrose see half-year losses balloon to £88m as boss blames Labour’s tax hikes

John Lewis Partnership losses deepened following Labour’s tax raid last year, but its boss insists there is ‘good momentum’ for the group’s turnaround.

The department store and Waitrose owner saw its pre-tax losses widen to £88million over the six months to 27 July, from £30million over the same period last year.

It blamed £29million in costs for a new packaging levy – the Extended Producer Responsibility (EPR), as well as higher National Insurance Contributions (NICs) for employers.

The EPR has shifted the cost of recycling from councils back on to companies and has been controversial in the sector.

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

Bosses yesterday said it depends on the company’s performance in the current half of the year.

John Lewis boss John Tarry says the Chancellor must make meaningful reforms to hated business rates

The retailer typically performs better in its second half due to Black Friday and Christmas.

Boss John Tarry told the Daily Mail: ‘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.’

Tarry joins calls for business rates reform  

He insisted the Chancellor must make meaningful reforms to hated business rates.

Tarry said he was among those to attend a meeting at Number 11 with the Chancellor last week where retailers ‘were pretty clear then that business rates was our number one priority, to make sure that you know the manifesto promise of reform was going ahead’.

Business rates are the largest cost to the firm after staff pay, he added.

The retailer stands to be one of those most negatively impacted by proposed reforms to increase taxes on larger properties.

But Tarry insisted the meeting with the Chancellor had been ‘constructive’ and the group would ‘react accordingly’ when the Government sets out more information.

It comes as other well-known retailers, including Greggs, JD Sports and Primark, have warned of gloomier consumer sentiment.

Peter Ruis, managing director for John Lewis, said: ‘I wouldn’t want to underplay that we are seeing considerable cost increases for our customers, be it energy pricing or general inflation.’

But he said the John Lewis customer had likely benefited from recent mortgage cuts and the firm’s market research showed ‘they appear slightly more confident coming into this autumn and Christmas period than they were over the last six months and over the last 12 months’.

Tarry and Ruis have been overseeing an attempted turnaround at the business, which was struggling for several years after the pandemic.

But it returned to profit last year following a cost cutting programme.

And the business has invested £191million in its first half, with new ‘beauty halls’ launching across the country.

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

Sales over the first half rose 4 per cent to £6.2billion as customers continued to respond well to its relaunch of a century old price promise.

It brought back its ‘never knowingly undersold’ pledge last year after it was scrapped in August 2022, despite dating back to 1925.

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