Higher costs push John Lewis deeper into the red

(Sharecast News) - Losses mounted at the John Lewis Partnership in the first half, the retailer confirmed on Thursday, on the back of higher costs and increased investment. Total trading sales at the department store chain, which also owns Waitrose, rose 4% in the 26 weeks to 26 July to £6.2bn.

Supermarket sales sparked 6% to £4.1bn, the first time they have surpassed £4bn at the half year mark. The department stores reported a 2% uplift to £2.1bn.

However, group-wide operating losses came in at £38m, compared to profits of £23m a year previously, while pre-tax losses widened to £88m from £30m.

John Lewis flagged a number of higher costs, including £29m on the new packaging levy and higher employer national insurance contributions.

The retailer also spent £191m on store upgrades, digital services and modernising its supply chain during the first half, with a further "significant" uplift in investment planned for the rest of the year.

At Waitrose, prices have been trimmed and stores refurbished, while more beauty and technology brands have been introduced at John Lewis.

Jason Tarry, who took over as chair a year ago, said: "Our clear focus on accelerating investment in our customers and brands is working.

"The investments we are making, combined with our plans for peak trading, provide a strong foundation for the remainder of the year. While we are reporting a loss in the first half, we're well positioned to deliver full-year growth."

The employee-owned partnership currently has 36 department stores and more than 300 grocery shops.