John Lewis Partnership half‑year loss widens to £88m as boss blames tax hikes

John Lewis Partnership, owner of department store John Lewis and supermarket chain Waitrose, reported a pre‑tax loss of £88 million for the six months to July 27, up from a £30 million loss in the same period a year earlier, and attributed much of the deterioration to tax and regulatory changes introduced in last year’s Budget.

The group said £29 million of the first‑half hit related to the new Extended Producer Responsibility (EPR) packaging levy, which shifts the cost of recycling from local authorities back onto producers, and that higher employer National Insurance contributions also added to the charge. Chief executive Jason Tarry called on Chancellor Rachel Reeves to deliver “meaningful reforms” to business rates, saying the tax remains the company’s largest cost after staff pay.

Tarry said the company attended a meeting at Number 11 with the Chancellor and other retailers to press for business‑rates reform and described the discussion as “constructive.” He added that government detail on planned changes would determine the group’s response. The retailer warned it could be among those most negatively affected by proposed reforms that would raise taxes on larger properties.

Despite the loss, John Lewis Partnership reported a 4% rise in sales to £6.2 billion in the half and said it invested £191 million in the period, including new store initiatives such as expanded beauty departments. The group returned to profit last year after a multi‑year recovery and cost‑cutting programme, and management said it remains “well positioned to deliver full year profit growth” and to continue investing in customers and staff.

Peter Ruis, managing director of John Lewis, acknowledged that customers face cost pressures from energy and general inflation, but said market research indicated shoppers were “slightly more confident” heading into the autumn and Christmas trading period following recent mortgage rate cuts. The retailer said its trading outlook typically improves in the second half due to Black Friday and holiday sales.

The partnership also said it was too early to confirm whether its roughly 66,000 partners (employees) will receive a bonus for the first time since 2021, with the decision to depend on performance in the current half of the year.

The EPR has proved controversial across the retail sector because it reallocates recycling costs to companies; John Lewis’s disclosure of the £29 million charge follows warnings from other household names about tougher conditions for shoppers and retailers. Several other chains, including Greggs, JD Sports and Primark, have flagged weakening consumer sentiment and cost pressures in recent weeks.

Management highlighted steps taken to bolster the business, including a relaunch of a long‑standing price promise and new fashion lines intended to attract customers from rivals such as Next and Marks & Spencer. The partnership said the investments and peak‑season plans provide “a strong foundation for the remainder of the year.”

Analysts and investors will watch whether the promised business‑rates reforms materialise and how the group’s second‑half trading performs, as broader retail sector indicators suggest a mixed consumer environment. The company reiterated that any final assessment of partner bonuses and full‑year profit guidance would reflect trading outcomes over the coming months.