John Lewis: Losses widen but has the ‘darling of the middle classes’ turned a corner?

Hopes are rising that John Lewis may have turned a corner after the retail stalwart posted a hike in sales and said it was “well positioned” to deliver full-year profit growth.

The employee-owned group, which runs the John Lewis department store chain and Waitrose grocery business, said group sales in its first half grew to £6.2 billion, an increase of 4 per cent year-on-year, while customer satisfaction had risen to its highest recorded level.

However, the John Lewis Partnership (JLP) also reported a loss before tax of £87 million for the 26 weeks to July 26 after being hit by increases to national insurance (NI) contributions and packaging taxes. That was much higher than the £29m deficit for the same period a year earlier.

The employee-owned John Lewis Partnership encompasses the upmarket Waitrose grocery business.

Pre-tax losses before exceptional items amounted to £33m in the first half of 2025, wider than 2024’s shortfall of £4m.

Exceptional costs were linked to the company’s ongoing turnaround programme and non-cash impairments were also taken into account.

JLP said this included a £29m impact from the extended producer responsibility (EPR) packaging and higher employer NI payments, after they were introduced in April following last year’s autumn Budget.

The group also said its profitability was dragged down by its significant investment plan. Those investments in technology, supply chains and stores have helped drive stronger sales momentum over the half-year and increased customer numbers, it added.

JLP said it expected continued sales growth to support stronger profits in the second half of the year despite “challenging” wider economic conditions. The group’s profits, like many retailers, are heavily weighted to the second half of the year, which includes the key Christmas trading period.

Chairman Jason Tarry 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.”

Waitrose is said to have performed “ahead of the market” with sales surpassing £4bn in the first half for the first time. This performance was driven by a 6 per cent increase in sales to £4.1bn and a 3 per cent rise in volumes, with almost all growth like-for-like. John Lewis sales, meanwhile, lifted 2 per cent to £2.1bn, outperforming a market impacted by “ongoing economic uncertainty”.

Garry White, chief investment commentator at Charles Stanley, said: “Despite the difficult retail backdrop, it looks like the partnership will be in a great position to restart its staff bonus programme at the end of this year. These results and the outlook for the rest of the year probably means the partners are likely to expect it. Management is unlikely to want to disappoint.”

John Lewis: Losses slashed but turnaround plans will take another two years