John Lewis Partnership closed the first half of the 2026-2027 financial year with sales up 2% to £6,3 billion, but with a significant widening of losses, in a market characterized by weak discretionary spending and rising operating costs. In the 26 weeks ended August 1, the loss before tax and exceptional items reached £89 million, compared to £34 million in the same period of the previous year. Including exceptional items, the loss rose to £124 million, compared to £88 million in 2025-2026.
The group's financial results were impacted by investments in its transformation, more challenging trading conditions, especially in the non-food sector, and increased labor, technology, and management costs during the heatwaves that hit the UK. The group generated £131 million from operating activities, £46 million less year-over-year, while still maintaining overall liquidity of £1,4 billion and an external debt level defined as historic lows.
Investment increased 29% to £246 million and is expected to reach approximately £600 million for the full year, with resources focused on store modernization, electronic labeling, supply chain automation, and inventory management systems. The two main brands performed differently: Waitrose continued to grow, while John Lewis was impacted by consumers' declining propensity to purchase higher-value discretionary items.
Waitrose's sales increased 4% to £4,3 billion, while adjusted operating profit fell from £110 million to £103 million and the margin fell from 2,8% to 2,6%, partly due to the decision to invest in price reductions and loyalty programs. During the first half of the year, Waitrose allocated an additional £20 million to permanently reduce prices and plans a similar move by September, bringing the total investment in this area to over £180 million since 2023.
Positive signs came from the premium Waitrose No. 1 range, whose sales grew 15%, and the online channel, which grew 11%, while the brand introduced more than 540 new own-brand products. Waitrose also renovated 15 supermarkets and installed electronic shelf labels in 225 stores, while acquiring three new sites, including those for the Hale Barns and Cricklewood supermarkets, scheduled to open by the end of the year.
The group also began construction of Waitrose's first distribution centre in South West England, in Avonmouth, a facility that will create over 550 jobs and serve around 50 stores by the beginning of 2027. John Lewis performed weaker, reporting sales of £2 billion, down 2%, and an adjusted operating loss of £83 million, compared to £53 million in the same period of the previous financial year.
Greater selectivity in promotions and tighter inventory management still drove a 5,5% increase in full-price sales, despite the use of additional promotional initiatives to support demand. Meanwhile, John Lewis is continuing its department store renovation program, with investments totaling £50 million across its Glasgow, Cambridge, Leicester, Reading, and Liverpool locations.
During the first half of the year, the brand introduced over one hundred new brands and products, presented a new concept dedicated to sports and wellness, and launched the Platter restaurant project, which is expected to reach 32 bars and restaurants by the end of 2027. President Jason Tarry emphasized that the already transformed stores are performing better than the rest of the network, a trend that, according to the group, confirms the business opportunities still available for both brands.
The Partnership remains cautious about its outlook for the second half of the year, however, given the economic and geopolitical uncertainties and the pressure they continue to exert on purchasing behavior. The full-year result will largely depend on the Christmas period, during which the John Lewis Partnership traditionally generates the majority of its profits.
