John Lewis unveils one-off cost-of-living payment as losses widen

The retail group, which owns Waitrose and the eponymous department store chain, said its losses widened to £99m during the 26-week period to July 30, 2022, compared to a £29m loss the same period a year ago.

The partnership blamed the performance on surging inflationary costs not being passed fully on to consumers, the impact of the cost-of-living crisis, unwinding Covid shopping patterns and investments in staff, customers and suppliers. 

John Lewis reported a 3% like-for-like increase in sales to £2.1bn for the period, while Waitrose like-for-like sales suffered a 5% slump to £3.6bn. 

Fashion was the best performing category for John Lewis in the first half, growing 25% compared with last year, driven by strong performance in holiday wear, while home and technology, which performed strongly during the pandemic, declined year on year. 

Sales of Anyday, John Lewis’ value own brand, have risen 28% year on year and John Lewis’ trading operating profit has been maintained at £295m compared with last year.

Waitrose reported that basket sizes had shrunk by nearly a fifth, despite total customer numbers increasing 6% year on year to 13.4 million.

Waitrose’s trading operating profit fell by £93m to £432m due to a combination of volume decline and inflationary pressures being partially offset by a more favourable profit mix and cost savings.

One-off payment

The retailer also announced today that it would be making a one-off £500 cost-of-living payment to full-time staff and less for part-time workers.

John Lewis said it would offer staff free food over the winter and would be doubling its financial assistance fund to help with bills.

To support customers during the cost-of-living crisis, the retailer said it had invested £500m into prices during the financial year after the retirement of its ‘Never Knowingly Undersold’ campaign. 

It has also invested £16m in British pig farmer suppliers to “ensure not just their survival but their ability to continue to meet high animal welfare standards”.

In a letter to staff, chair Sharon White warned that the outlook for the rest of the year was “uniquely uncertain” and said that the payment of the famous Partnership Bonus hinged on delivering “a substantial strengthening of performance, beyond what we usually achieve in the second half”.

To help with this, she said John Lewis would open Christmas markets in 13 John Lewis stores and launch 60 new Waitrose products.

“Time and again, we have been tested as a group,” said White. “We have always come through – and stronger – by being mindful of the challenges but also open to new opportunities. We will do so again.”

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