The owner of John Lewis department stores and Waitrose supermarkets recorded a pre-tax loss of £88 million for the six months to late July, nearly triple the figure from the same period last year.
This sharp increase follows the government’s implementation of higher employer National Insurance rates and the introduction of the Extended Producer Responsibility (EPR) packaging levy, which alone added £29 million to costs- split between packaging and NICs.
Despite a 4% rise in group sales to £6.2 billion and Waitrose achieving a 6% sales boost, investment costs and the burden of new taxes offset this growth. John Lewis warned that higher prices and “inevitable” job reductions remain a risk for the retail sector as tax expenses rise- concerns the company and other retailers previously raised after the autumn Budget.
Chairman Jason Tarry said the partnership is committed to restoring staff bonuses “as soon as we possibly can”, but acknowledged it was too soon to say when.
The group, which has not paid staff a bonus for multiple years, expects its investment in technology, supply chain, and stores to strengthen customer loyalty and support plans to hire up to 13,000 seasonal staff for Christmas.
John Lewis leadership remains confident of returning to profit in the second half, citing expected strong festive trading- particularly in categories like wearable technology and plush toys.
Retail analysts note that John Lewis’s strategy of knowledgeable service and savvy pricing has helped its comeback following the pandemic and fierce competition.
However, the increased tax burden posed by higher NICs is being felt widely, with retail bodies warning of further pressures on prices and employment across the sector.
