The John Lewis Partnership has reported a sharp deterioration in first-half profitability as cautious consumers reduced discretionary spending, while the employee-owned retailer warned that economic and geopolitical uncertainty would continue to weigh on trading through the crucial Christmas period.
The group, which owns the John Lewis department store chain and Waitrose supermarkets, reported losses before tax and exceptional items of £89 million for the six months to August 1, compared with £34 million a year earlier.
On a statutory basis, pre-tax losses widened to £124 million from £88 million, with higher costs including the restructuring of its head office adding to the pressure.
The reorganisation of JLP’s central teams has resulted in some job losses, although the group said the impact was less than 1 per cent of its total workforce.
Overall sales increased 2 per cent to £6.3 billion. However, department store sales fell 2 per cent as consumers held back from larger purchases, while Waitrose sales increased 4 per cent.
Jason Tarry, chairman of JLP, said: “Our first-half results reflect our continued investment in our transformation, a more challenging trading environment and the increased costs of doing business.”
Mr Tarry told the Press Association that consumers were becoming increasingly cautious over major purchases.
“Consumers are holding back on spending on bigger ticket items.
“They’re cautious at the moment given what’s going on in the world.”
JLP said the second half, which includes the key Christmas trading period, would remain decisive for its full-year performance.
“There is no doubt the wider economic and geopolitical landscape has weighed on our customers during the first half and we remain cautious in our outlook for the second half.
“As in every year, the majority of our profit is earned in the second half, and the full-year outcome will be determined by peak trading.”
Mr Tarry warned of additional cost pressures from the conflict with Iran and higher employment costs following increases in National Insurance and wages. He said JLP was operating in a “highly competitive market” and was “committed to making sure we do everything we can” to keep prices down.
The weakness marks a reversal from 2025-26, when group sales increased 3 per cent.
Underlying operating losses at John Lewis widened to £83 million from £53 million, with the retailer saying it had “invested more in promotions in response to the subdued market”.
Will Kernan, previously a non-executive director at John Lewis, has taken over the department store business from Peter Ruis. His previous roles include leading River Island and The White Company.
Susannah Streeter, chief investment strategist at Wealth Club, said the summer heatwaves had also affected trading.
“While the soaring temperatures over the summer might have boosted online sales of fans, outdoor goods and picnic treats, it made shopping a less attractive hobby as households found ways to cool off instead.
“When they did want to browse online or in stores, shoppers – with increasingly tight budgets – have been choosier, looking for bargains or discount sites for a retail fix.”
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