An increase in national insurance contributions and a packaging levy has 'significantly' affected John Lewis, with the retailer posting a half-year loss despite revenue growth.
The company, which also operates Waitrose, recorded a pre-tax loss of £33m before exceptional items for the 26 weeks ending 26 July, as reported by .
It has been "significantly impacted by costs not present in the equivalent prior period", the firm stated, including £29m in expenses for the new Extended Producer Responsibility (EPR) packaging levy and elevated National Insurance Contributions (NICs).
Retailers nationwide have been outspoken regarding the harm inflicted by the increased taxes unveiled in the previous autumn Budget, which have resulted in reduced recruitment across the sector.
Chairman Jason Tarry acknowledged that weakened consumer confidence presented an additional obstacle, though the business can "continue to progress momentum through into the second half, and particularly going into Christmas."
"We will focus on what we can control and what we can what we can do. We'll do the right things now, but also for the long term," he stated during an investor call.
John Lewis indicated it was "well-positioned" to achieve full-year profit growth in the second half, when it typically generates the bulk of its sales and earnings.
Chief financial officer Andy Mounsey noted that the company remains committed to "driving continued customer service," with intentions to hire up to 13,000 positions to support Christmas trading. Robyn Duffy, Senior Analyst for Consumer Markets at RSM º£½ÇÊÓƵ, stated that "the picture is more stable than the headline suggests."
"On a like-for-like basis, profitability was broadly flat year-on-year – underlining that the core business remains resilient," added Duffy.
M&S cyber attack 'unexpected windfall' for John Lewis
Group sales over the six-month period rose to £6.2bn, marking a four per cent increase year-on-year, fuelled by a six per cent growth at Waitrose and two per cent at John Lewis.
Duffy suggested that the "recent M&S cyber-attack likely resulted in an unexpected windfall for John Lewis."
"With M&S's online functions temporarily unavailable from April to June and stock on shelves significantly impacted, many consumers, particularly those in the overlapping target demographic, would have naturally turned to John Lewis as an alternative," Duffy further commented.
However, James Bailey, Managing Director of Waitrose, downplayed reports that the M&S attacks had benefited John Lewis.
"It wasn't much of an impact for us... we're just carrying on as normal and attracting new customers from wherever they come," he said.
