John Lewis has reported that its losses almost tripled in the first half of the year, driven largely by the financial impact of dealing with waste packaging and increased National Insurance Contributions (NICs). The employee-owned business, which operates John Lewis department stores and Waitrose supermarkets, indicated that losses before tax and exceptional costs rose to £88 million from £30 million in the previous year.
The chair of John Lewis Partnership, Jason Tarry, acknowledged a notable decline in consumer confidence as the upcoming Budget in November approaches. Despite this, the company anticipates a return to profitability in the latter half of its financial year, which includes the crucial Christmas shopping period.
The company reported expenditures totaling £29 million in relation to the new Extended Producer Responsibility (EPR) policy, which shifts packaging waste costs from local governments to retailers and producers, as well as higher NICs. These costs were roughly evenly divided between the packaging levy and employer NIC payments. Notably, the Bank of England has indicated that the EPR levy could potentially increase food prices by up to 0.5% if fully passed on to customers.
Last year, John Lewis was among several UK retailers that warned of impending price rises and probable job losses due to changes to NICs announced in the previous year’s Budget. Tarry emphasized that the company will focus on aspects it can manage. He expressed optimism about a profitable outcome leading up to Christmas, supported by anticipated strong sales in various product categories.
The sales at Waitrose increased by 6% to £4.1 billion, contributing to a total revenue growth of 4% across the partnership, which reached £6.2 billion. Tarry affirmed the company’s commitment to providing employee bonuses, noting that staff have not received a bonus in the past three years. John Lewis has also made strategic efforts to regain customer interest after the pandemic and in light of growing competition from other retailers.
Source: https://www.bbc.com/news/articles/cx2jm4pgejjo?at_medium=RSS&at_campaign=rss