John Lewis H1 losses widen amid tax and budget costs
Nonetheless, Partnership sales rose by 4% year-on-year to £6.2bn, while total revenues grew by 5% to £5.4bn
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The John Lewis Partnership has fallen to a £34m loss in the first half of the year, up from a £5m loss the same period last year, attributing the widened loss to a new packaging tax and the effects of the budget.
Excluding exceptional items, losses almost tripled from £33m to £84m over the period.
The group said this result was “significantly impacted by costs not present in the equivalent prior period”, including higher National Insurance Contributions (NICs) as well as £29m of costs for the new Extended Producer Responsibility packaging levy.
Nonetheless, Partnership sales rose by 4% year-on-year to £6.2bn, while total revenues grew by 5% to £5.4bn.
Waitrose performed ahead of the market over the period, as sales rose by 6% and surpassed £4bn in the first half for the first time, and volumes rose by 3%. Meanwhile, John Lewis sales rose by 2% to £2.1bn.
This followed an accelerated investment in store upgrades, digital services and “essential modernisations” to its technology and supply chain.
The group also reported its highest level of positive customer satisfaction in the half, while customer numbers were up 4%. It also reported growth in its loyalty schemes, with My Waitrose up 6% and My John Lewis up 13%.
Looking ahead, the group said it expects the macroeconomic environment to “remain challenging”, but added its “momentum” and plans for the second half sees it “well positioned to deliver full year profit growth”.
Jason Tarry, chairman of the John Lewis Partnership, said: “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.”
