John Lewis Sales Fall as Losses Widen amid Continued Investment

John Lewis has reported a 2% decline in first-half sales as weaker demand for discretionary purchases and higher costs contributed to a widening operating loss.

For the 26 weeks to 1 August 2026, John Lewis sales fell to £2.0bn, compared with £2.07bn in the same period last year. Adjusted operating losses increased to £83m from £53m, reflecting softer trading, cost inflation and continued investment in the transformation of the business. 

The retailer said the wider discretionary market had become more challenging during the period, although disciplined stock management and more targeted promotional and clearance activity helped full-price sales increase by 5.5%. 

Across the wider John Lewis Partnership, which also includes Waitrose, sales increased by 2% to £6.3bn. However, loss before tax and exceptional items widened significantly to £89m, compared with £34m a year earlier, with the Partnership citing increased investment, tougher trading conditions and the higher cost of doing business. 

Investment across the Partnership increased by 29% to £246m during the half, as the business accelerated store modernisation, technology upgrades and improvements to its supply chain and inventory management systems. Cash generated from operations fell by £46m to £131m, while total liquidity remained at £1.4bn. 

John Lewis said there were encouraging signs that investment in its omnichannel proposition was beginning to deliver results, with refurbished stores outperforming the wider estate.

The retailer is investing £50m in its store estate this year, including projects in Glasgow, Cambridge, Leicester, Reading and Liverpool. It has also introduced more than 100 new brands and products, launched a new Sport and Wellness concept and unveiled its new Platter hospitality proposition, which is expected to reach 32 cafés and restaurants by the end of 2027. 

Investment during the first half has also supported what John Lewis describes as a significant refresh of its website, while the reinstated Never Knowingly Undersold proposition continues to form part of its focus on quality, service and competitive value. 

Will Kernan has been appointed Managing Director of John Lewis, succeeding Peter Ruis. 

At Partnership level, the statutory loss before tax increased to £124m from £88m in the comparable period, including £35m of exceptional costs, principally associated with restructuring and the modernisation of its cloud technology. 

Jason Tarry, Chairman of the John Lewis Partnership, said the results reflected continued investment in the transformation of the business alongside a more challenging trading environment and increasing operating costs.

He added that stores which had already been transformed were outperforming the rest of the estate, giving the Partnership confidence in the longer-term commercial potential of both John Lewis and Waitrose. 

The performance of the two businesses diverged during the half. Waitrose sales increased by 4% to £4.3bn, while John Lewis continued to be affected by pressure on consumer spending on larger discretionary purchases.

The Partnership remains cautious about the second half, citing continued economic and geopolitical uncertainty. It said the majority of its annual profit is traditionally generated during the second half of the year and that the full-year result will therefore be heavily dependent on peak trading. 

Insight DIY Analysis

The numbers underline the challenge facing John Lewis. The business is continuing to invest heavily in stores, digital and its proposition at precisely the point when consumers are becoming more cautious about larger discretionary purchases.

The encouraging element is the evidence that refurbished stores are outperforming the wider estate. The key question now is whether those improvements can be translated quickly enough across the business to offset rising costs and restore profitability.

For suppliers operating across Home, the results are also worth watching closely. John Lewis Home revenue fell to £413m from £425m in the comparable period, while Fashion and Technology revenues also declined. 

With the critical Christmas trading period still ahead, the second half will provide a much clearer indication of whether the retailer's investment programme is beginning to translate into meaningful commercial returns.

Source : John Lewis Partnership 

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