John Lewis Partnership Reports £78 Million Loss and Announces Cost Savings Target

The John Lewis Partnership has reported a loss of £78 million before exceptional items for the year to January 28, a stark reversal from the £181 million profit the year earlier.^[0] The retail giant attributed the slump to inflationary pressures and product supply challenges, such as a major fire at their Brinklow warehouse that hit availability at Waitrose in the summer.^[1]

The group, which runs the department store chain and the Waitrose supermarket arm, said it is now looking to triple its cost savings target to around £900 million by January 2026, including an extra £236 million from further “simplification”.^[2] Chairwoman Dame Sharon White told staff in a letter that the mantra for the year is “cost out, margins up and customer focus”, and apologised for the lack of a bonus payment after a “tough set of results”.^[3]

White also said that the need to become more efficient and productive will have an impact on the number of partners, leading to possible job cuts.^[2] To help tackle the losses, the group drafted in its first chief executive, Nish Kankiwala, this week.^[4] Mr. Kankiwala has previously been in high-ranking positions at Hovis, BurgerKing,^[5]

Josh Holmes, senior consultant at Retail Economics, said: “These results are worse than expected, with both Waitrose and John Lewis seeing profits retrench as inflation sends costs spiraling.”^[1] The John Lewis Partnership is also offering its financial assistance fund, worth £800,000, to help with travel, childcare and living costs for staff.

0. “John Lewis Partnership insists transformation plan ‘on track' despite £234m loss” Marketing Week, 16 Mar. 2023, https://www.marketingweek.com/john-lewis-transformation-on-track-despite-loss/

1. “John Lewis Partnership bonus axed as losses balloon” This is Money, 16 Mar. 2023, https://www.thisismoney.co.uk/money/markets/article-11866933/John-Lewis-Partnership-bonus-axed-losses-balloon.html

2. “John Lewis warns on jobs as staff lose bonus, profits slump” ShareCast, 16 Mar. 2023, https://www.sharecast.com/news/news-and-announcements/john-lewis-warns-on-jobs-as-staff-lose-bonus-profits-slump–12695264.html

3. “John Lewis warns of job cuts as it cancels staff bonus” The Independent, 16 Mar. 2023, https://www.independent.co.uk/business/john-lewis-job-cuts-bonus-cancelled-b2302080.html

4. “John Lewis staff miss out on bonus for second time in 70 years” upday Polska, 16 Mar. 2023, https://www.upday.com/uk/john-lewis-staff-miss-out-on-bonus-for-second-time-in-70-years

5. “No staff bonus at John Lewis as partnership plunges to hefty losses” Evening Standard, 16 Mar. 2023, https://www.standard.co.uk/business/bonus-john-lewis-partnership-losses-waitrose-b1067626.html