Meanwhile, the John Lewis Partnership today announced an almost trebling of losses in their first half-year. They announced a record drop in producer prices that pointed to a weak inflation outlook ahead of the 2023 holiday shopping season. Jason Tarry, chair of the partnership, acknowledged the current economic climate, stating there is “no doubt that consumer confidence is subdued” as the company prepares for the upcoming Budget in November.
Even with such headwinds, by value, total revenue through the partnership grew by 4%, to £6.2 billion. Waitrose – you’re on a winning streak! Exports jumped by 6%, to a record high of £4.1 billion. Tarry is definitely in a positive mood about this Christmas season coming. He anticipates robust sales for top gifts such as the latest generations of wearable tech and Jellycat plush.
Tarry stressed the reality of the financial pressures continued to bear on the partnership. John Lewis was staring down a £29 million bill in the last six months before July 26. This £13 billion boost was largely as a result of the new packaging tax and increased employer National Insurance contributions. The chair noted that John Lewis has not paid staff a bonus in three years, a situation he hopes to rectify.
“We are committed to paying our staff a bonus as soon as we possibly can,” – Jason Tarry
Tarry admitted that it’s “way too early in the year” to tell when bonuses could be restored. He doubled down on the company’s commitment to “control the controllables,” in his words, as inflation spikes and consumers shift their shopping patterns.
Last year, the late John Lewis chairman reintroduced their price promise policy of “Never Knowingly Undersold.” This decision represented a significant victory for the company, particularly after they had pulled out two years prior. Tarry believes this commitment will help rebuild trust with customers who may be hesitant to spend in the current environment.
Zoe Mills, lead analyst at GlobalData, suggested that John Lewis can continue to draw in customers by providing knowledgeable staff who can assist with product inquiries. She noted that personal service might be the Lifeway brand’s most important differentiator amid a turbulent retail environment.
As John Lewis moves forward, Tarry concluded with an optimistic outlook, stating, “We are a second half business, no doubt about that. All of our profit is in the second half.” This sentiment reflects the company’s belief that despite current losses, there is potential for growth driven by strong holiday sales.