Introduction: Losses widen at John Lewis amid rising costs
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Losses have widened at John Lewis, as the high street bellwether is hit by rising costs as it tries to nail its turnaround plan.
The John Lewis Partnership has reported an £88m pre-tax loss for the first half of its financial year this morning, up from £30m a year ago.
It points the finger at the higher National Insurance Contributions (NICs) brought in by chancellor Rachel Reeves in last year’s budget, plus £29m of costs from the UK’s new packaging levy.
On a brighter note, sales across the partnership – which includes Waitrose and John Lewis department stores – rose by 4% in the 26 weeks to 26 July 2025, to £6.2bn. That may indicate that the turnaround strategy is paying off.
Chairman Jason Tarry insists that the Partnership is on track to deliver profit growth for the full year, saying:
“Our clear focus on accelerating investment in our customers and our brands is working: more customers are shopping with us, driving sales, and helping Waitrose and John Lewis outperform their markets. We achieved our highest recorded levels of positive customer satisfaction, a testament to the great service of our Partners.
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 profit growth, which we’ll continue to invest in our customers and Partners.
Last year, the company tripled its profits to £126m; earnings are higher in the second half of the year due to Christmas and Black Friday.
Also coming up today.
The European Central Bank is expected to leave eurozone interest rate on hold, at a governing council meeting overshadowed by the political crisis in France.
Investors will also be watching the latest US inflation report, which is expected to show the cost of living rose at a faster pace in August. Headline inflation is forecast to rise to 2.9%, up from 2.7% a month earlier.
Kathleen Brooks, research director at XTB, sets the scene…
We are reaching the apex of the week, US CPI and to a lesser extent the ECB meeting, will determine the direction of markets in the short term.
As we lead up to these key events, the dollar is mixed, market enthusiasm for stocks remains high, the S&P 500 made a fresh record on Wednesday, and futures suggest that the US and European stocks could open slightly higher later today.
The agenda
-
9am BST: IEA’s monthly oil market report
-
1.15pm BST: European central bank interest rate decision
-
1.30pm BST: US inflation report for August
-
1.45pm BST: ECB press conference
Key events
The Docklands Light Railway is also suspended today, due to the strike action.
A full service is expected to run for the rest of the week, though
Speaking of Heathrow…. London’s largest airpost has reported that it handled more than eight million passengers in August, a record high.
Heathrow says it is the first major European airport to hit the 8m passenger mark.
It adds that this “milestone achievement” further cements its role as “the UK’s gateway to growth”, before warning that it is now operating at “full capacity”.
It adds:
With record numbers choosing Heathrow this summer, we hit our busiest ever day on 1st August with over 270,000 passengers, we eclipsed our previous record departures and arrivals days and Terminal 5 set a new single-day record on 22nd August – successfully welcoming more than 112,000 travellers.
Heathrow says it welcomes the government’s commitment to expanding the airport – last month, it submitted plans for a third runway.
Heads-up, London commuters: the Piccadilly Line is stirring into life.
Having been listed as ‘suspended’ this morning, the Piccadilly Line has been upgraded to “part suspended, minor delays’.
This is because trains are now running with minor delays between Acton Town and South Harrow, two stations on the west side of the capital. There is still no service on the rest of the line due to strike action.
That’s only of limited use for travellers hoping to get all the way into London. It also won’t get passengers out to Heathrow airport (where one leg of the Piccadilly Line terminates, when it’s running).
Waitrose, John Lewis’s upmarket grocer, racked up record sales in the last six months.
JLP reports that Waitrose performed ahead of the market with sales surpassing £4bn in the first half of the year for the first time.
Sales rose by 6% to £4.124bn, up from £3.909bn in the 26 weeks to 27 July 2024, with sales volumes up 3% (implying that rising prices were also a factor).
John Lewis reports that its investments have helped build momentum over the first half, “delivering growth in sales, customer numbers, loyalty and satisfaction”.
It cautions that it expects the macroeconomic environment to remain challenging, but insists it is “well-positioned” to deliver full year profit growth.
The Metro newspaper predicts another day of “commuter hell” in London, with long queues for buses, higher prices on Uber and Bolt, and the risk of “miserable cycling journeys” with rain forecast.
They point out that most of the Elizabeth line – which runs from as far as Reading in the west to Shenfield and Abbey Wood in the east – is running today, along with the buses and Overground trains.
However, Elizabeth line trains were not expected to stop at Bond Street, Tottenham Court Road, Farringdon, Liverpool Street and Whitechapel stations before 8am today.
John Lewis’s profits were also hit by £30m of “investment in operating costs” spent on its technology, financial services, and its head office and distribution teams.
The partnership says this spending is needed to accelerate its growth, explaining:
While this impacts profitability in the short term, it is a foundational part of our strategy for the benefit of our customers and Partners. Our strong cash generation and liquidity, combined with our ability to take a long-term perspective, enables us to make these crucial investments to support our growth in the second half and for years to come.
Tube lines suspended as final day of strike gets underway
Travellers in the UK capital are facing another day of disruption, as staff on the London Underground continue to hold a strike.
All 11 underground lines are currently suspended this morning, meaning commuters will be attempting to squeeze onto busus, cycling, or walking to the office.
There were already crowds building at the bus stops outside Kings Cross as I cycled into the office early this morning – good luck to all attempting to get to work today.
Yesterday, some limited tube services did run, and Transport for London (TfL) had hoped to run more trains again today.
Yesterday, RMT general secretary Eddie Dempsey called on the London mayor, Sadiq Khan, to meet the union.
He told the TUC Congress:
“Stop going on social media, invite us to the meeting, let’s have a discussion, because I want to know what is going on in London.”
Introduction: Losses widen at John Lewis amid rising costs
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Losses have widened at John Lewis, as the high street bellwether is hit by rising costs as it tries to nail its turnaround plan.
The John Lewis Partnership has reported an £88m pre-tax loss for the first half of its financial year this morning, up from £30m a year ago.
It points the finger at the higher National Insurance Contributions (NICs) brought in by chancellor Rachel Reeves in last year’s budget, plus £29m of costs from the UK’s new packaging levy.
On a brighter note, sales across the partnership – which includes Waitrose and John Lewis department stores – rose by 4% in the 26 weeks to 26 July 2025, to £6.2bn. That may indicate that the turnaround strategy is paying off.
Chairman Jason Tarry insists that the Partnership is on track to deliver profit growth for the full year, saying:
“Our clear focus on accelerating investment in our customers and our brands is working: more customers are shopping with us, driving sales, and helping Waitrose and John Lewis outperform their markets. We achieved our highest recorded levels of positive customer satisfaction, a testament to the great service of our Partners.
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 profit growth, which we’ll continue to invest in our customers and Partners.
Last year, the company tripled its profits to £126m; earnings are higher in the second half of the year due to Christmas and Black Friday.
Also coming up today.
The European Central Bank is expected to leave eurozone interest rate on hold, at a governing council meeting overshadowed by the political crisis in France.
Investors will also be watching the latest US inflation report, which is expected to show the cost of living rose at a faster pace in August. Headline inflation is forecast to rise to 2.9%, up from 2.7% a month earlier.
Kathleen Brooks, research director at XTB, sets the scene…
We are reaching the apex of the week, US CPI and to a lesser extent the ECB meeting, will determine the direction of markets in the short term.
As we lead up to these key events, the dollar is mixed, market enthusiasm for stocks remains high, the S&P 500 made a fresh record on Wednesday, and futures suggest that the US and European stocks could open slightly higher later today.
The agenda
-
9am BST: IEA’s monthly oil market report
-
1.15pm BST: European central bank interest rate decision
-
1.30pm BST: US inflation report for August
-
1.45pm BST: ECB press conference
