John Lewis Partnership losses surge to £89m as chair criticises Labour tax changes
John Lewis Partnership has reported a significant widening of losses as its chair warned that Labour's business tax changes are hampering operations at the employee-owned retailer.
The company posted a loss before tax and exceptional items of £89 million for the six months to 1 August 2026, compared to £34 million in the same period last year. On a statutory basis, pre-tax losses reached £124 million, up from £88 million a year earlier, with exceptional costs of £35 million primarily related to head office restructuring.
Chair criticises government tax policy
Current chair Jason Tarry, who succeeded Sharon White in September 2024, criticised the government's approach to business taxation. The comments come as retailers grapple with increased costs from changes implemented in April 2025, when the employer National Insurance rate rose from 13.8% to 15%. The Secondary Threshold was simultaneously reduced from £9,100 to £5,000 per year, meaning employers now pay National Insurance on a larger portion of employee salaries.
For a business employing someone on £30,000 per year, these combined changes add approximately £870 annually in employer costs. For John Lewis Partnership, which employs around 65,000 staff members known as Partners due to the company's unique employee-ownership structure, such increases compound significantly across the entire workforce.
Sales rise but losses widen
The deteriorating financial performance comes despite overall sales rising 2% to £6.3 billion during the first half. However, this masks divergent performance across the group's divisions: John Lewis department store sales fell 2% while Waitrose sales increased 4%.
The results represent a sharp reversal from the full financial year ending January 2026, when the Partnership reported profit before tax, bonus and exceptional items of £134 million. That year ended with a statutory pre-tax loss of £21 million after £120 million of exceptional charges largely linked to legacy technology system write-downs.
Staff bonuses under threat
The widening losses cast doubt over the future of staff bonuses, which hold particular significance given the Partnership's employee ownership model. The approximately 65,000 Partners share in company profits through an annual bonus scheme when financial performance permits. The company only restored bonuses in March 2026 with a 2% payout totalling around £35 million, marking the first such payment in four years after three consecutive years without bonuses from 2023 to 2025.
The Partnership operates both the John Lewis department store chain and the Waitrose supermarket brand. The current financial pressures illustrate broader challenges facing British retailers as they navigate increased operating costs while attempting to maintain competitiveness in a challenging consumer environment.
Leadership changes have accompanied the financial turbulence. Sharon White stepped down in September 2024 after serving a single five-year term from February 2020, making her the shortest-serving chair in the Partnership's history before Jason Tarry took over the role.
