By James Davey
LONDON (Reuters) – British retailer, the John Lewis Partnership reported a deeper first half loss on Thursday but said more customers are shopping with the group and it was “well positioned” to deliver full-year profit growth.
The UK’s largest employee-owned business, which runs John Lewis department stores and the upmarket Waitrose supermarket chain, generates most of its sales and profit in the second half.
It made a loss before tax and exceptional items of 33 million pounds ($45 million) in the six months to July 26, compared with a loss of 4 million pounds in the same period last year. Sales grew by 4% to 6.2 billion pounds.
The deeper loss reflected higher employer National Insurance contributions and a new packaging levy.
“While we expect the macroeconomic environment to remain challenging, our momentum, coupled with exciting plans for the second half, sees us well positioned to deliver full year profit growth,” the partnership said without elaborating on those plans.
It made a profit before tax and exceptional items of 127 million pounds in its 2024/25 year.
Jason Tarry, the former Tesco executive who has chaired the partnership for a year, is leading a revival after the department store division in particular had a difficult period, first battling the COVID pandemic and then the cost of living crisis, cutting jobs and closing stores.
Under Tarry, the partnership has accelerated investment, spending 191 million pounds ($258 million) in the first half, with a significant uplift planned in the second half.
He said both the department store chain and Waitrose outperformed their markets in the first half, with growth in sales, customer numbers, loyalty and satisfaction.
Department store sales rose 2%, while Waitrose’s sales were up 6%.
While industry data published Tuesday showed British shoppers spent more in August, retailers are uneasy about how consumer confidence and spending could be constrained by speculation over potential tax increases in the government’s budget on November 26.
The boss of Primark owner Associated British Foods said on Wednesday he was also worried about rising unemployment.
($1 = 0.7400 pounds)
(Reporting by James Davey; editing by Sarah Young and Tomasz Janowski)
