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Losses at John Lewis and Waitrose owner almost triple to £88m

Retail analyst Nick Bubb has predicted that John Lewis will grow its full-year pre-tax profits (before exceptional items) to £200m this year, from £126m a year earlier.

He says today:

Well, JLP seem confident about second half prospects, but the first half results were badly affected by the surprisingly high £29m cost of the new Packaging Levy (£22m at Waitrose and £7m at John Lewis)...

“John Lewis reported a loss before tax and exceptional items of £34 million in the six months to 26th July, widening from a loss of £5 million in the same period last year. It blamed the Extended Producer Responsibility (EPR) packaging levy, higher National Insurance contributions, and additional investment for the deepening loss.

John Lewis might have got a boost from disruptions at its rival M&S during its cyber attack in April. While its 36 physical bricks and mortar retail stores have been operating in a challenging space for many years, Waitrose has been a bright spot which continues to prioritise quality while also focusing on competitive pricing, particularly in the face of intense competition from the likes of Aldi and Lidl.

“Waitrose’s performance has been a key driver, benefiting from a renewed focus on its food proposition, including a greater emphasis on lower prices and a more effective adoption of technology to improve the customer experience.

“Meanwhile, the John Lewis retail arm is successfully drawing in customers through a combination of revitalised physical stores, a focus on meaningful brand partnerships, and the reintroduction of its Never Knowingly Undersold price matching strategy. The retailer is clearly thinking smart with its partnerships, tapping into the current nostalgia trend with the announcement that Topshop will return to UK high streets.