The John Lewis Partnership has reported an £88million loss in the first half of the year.
Management pointed directly at government tax increases as a key reason for the decline.
The employee-owned retail group, which runs John Lewis department stores and Waitrose supermarkets, blamed rises in national insurance contributions and new packaging levies.
These costs were introduced after last year’s autumn Budget.
The additional charges created a significant drag on the partnership’s finances during the 26 weeks to July.
Losses marked a sharp deterioration compared with the £30million deficit recorded in the same period last year.
The group said new taxation measures alone stripped £29million from profits.
This included the Extended Producer Responsibility packaging tax and higher national insurance payments, which both came into effect in April.
Their spiralling costs were blamed on after last year’s autumn Budget.
|PA/GB News
The pre-tax loss before exceptional items stood at £34million for the half-year, and once restructuring charges and non-cash impairments were added, the figure widened to £88million.
This represents nearly three times the loss seen in the first half of last year, with management said investment spending also weighed on profitability.
The partnership has been directing funds into technology upgrades, supply chain improvements and store refurbishments.
Despite these pressures, leaders said the investments are beginning to deliver results.
Experts criticised Rachel Reeves for punishing businesses
| Parliament.tvSales momentum has improved, and customer numbers are rising across both brands.
Chairman Jason Tarry, who took up his role twelve months ago, struck an optimistic tone.
He said the group’s financial performance is traditionally stronger in the second half of the year.
That period includes the crucial Christmas trading season, which accounts for the bulk of annual profits.
Mr 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."
He also pointed to record customer satisfaction scores, crediting staff for exceptional service.
Mr Tarry added: "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."
The partnership said it remains confident in achieving profitable growth for the full year.
Management described wider economic conditions as "challenging" but expressed optimism about trading prospects.
Sustained sales growth is expected through the second half of the year.
Waitrose is part of the John Lewis Partnership
| GETTY IMAGES / WaitroseStrategic investments made during the loss-making period are designed to strengthen long-term competitiveness.
Both Waitrose and John Lewis are reportedly outperforming their markets.
The group said this positions it to capture market share in the months ahead.
Preparations are now focused on Christmas, with comprehensive plans in place to maximise peak demand.
The partnership’s emphasis on investment in customer experience and staff development remains central to its turnaround strategy.
Executives said these measures should help secure a return to profitability in the coming months.