John Lewis Partnership’s losses surged in the first half of the year as it ploughed money into regaining lost ground on rivals such as Tesco and M&S.
Pre-tax losses before exceptional items hit £33m in the 26 weeks to 25 July, down from a £4m loss in the same period a year ago.
The group insisted, however, it was still “well positioned” to deliver full-year profit growth.
The losses were largely driven by the decision to invest £191m in the period, part of an annual £600m in “catch-up investments” for Waitrose and John Lewis intended to close the ground to rivals. A significant uplift in spending is now planned for the second half.
“While we expect the macroeconomic environment to remain challenging, our momentum, coupled with exciting plans for the second half, sees us well positioned to deliver full year profit growth,” the partnership said.
The group was also weighed down by £29m of costs for the new extended producer responsibility packaging levy, where it loaded the full annual cost into the first half.
Total sales at the group rose 4% to £6.2bn, with both Waitrose and John Lewis performing ahead of the market, the group said.
Waitrose’s sales surpassed £4bn in the first half for the first time, with volumes up 3%. Around 9% more people are now shopping with Waitrose than two years ago, it added.
The supermarket completed has seven major refurbishments this year and announced its first large store opening in almost a decade as it part of its major investment.
John Lewis sales rose 2% to £2.1bn.
“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,” said chairman Jason Tarry.
“We achieved our highest recorded levels of positive customer satisfaction, a testament to the great service of our partners.”
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