John Lewis losses narrow as sales jump and cost-saving measures take effect

In the half-year period to July 31, 2021, the John Lewis Partnership reported a loss before tax of £29m, which the retailer called a “significant improvement” on the £645m loss before tax reported in the same period last year. 

The retailer reported exceptional costs of £98m in the first half, including £24m of property costs related to John Lewis store closures and £54m worth of restructuring and redundancy costs. 

John Lewis posted a slim profit of £69m before partnership bonus, tax and exceptional items, compared with a £55m loss for the same period year on year. 

Underpinning these narrowing losses was a 6% sales rise across the Partnership. Grocery arm Waitrose reported a 2% increase in sales for the period, while John Lewis reported a 12% sales surge compared with the same period last year and a 1% increase on pre-pandemic sales. 

Ecommerce sales continued to grow across both John Lewis and Waitrose for the period. At the department store giant, online sales accounted for 75% of all transactions during the period, up 35% on pre-pandemic levels. 

Waitrose reported 17% online sales for the period – an 11% increase year on year, although 3% lower than the 20% peak it achieved in March. 

To meet the growing demand for online grocery delivery, Waitrose increased capacity in shops and at a new west London distribution centre during the period. It also expanded its partnership with Deliveroo to 150 of its stores with an eye to capturing a younger customer. 

The retailer also said it was exploring how to make its two brands work better together. All general merchandise products sold in Waitrose will be sourced by John Lewis by Christmas, while 17 Waitrose shops now have designated John Lewis spaces – a number that will rise to 40 by the end of the year. 

John Lewis Partnership chair Sharon White struck a cautious tone in terms of the outlook for the rest of the year. While noting that “traditionally, our profits are skewed to the second half of the year because of the importance of Christmas”, she remained wary of the uncertainties around the ongoing pandemic as the UK moves into winter. 

The conditions for reinstating the staff bonus remain set at delivering profits of £150m and John Lewis said it would make the decision to award that bonus “in the usual way” in March 2022.