Robyn Duffy, consumer markets senior analyst at RSM UK, comments on today’s half year results from John Lewis: “John Lewis Partnership’s turnaround strategy is maintaining momentum, with the retailer reporting strong revenue growth in H2, driven by both its retail division and its food arm, Waitrose.
“Waitrose’s performance has been a key driver, benefiting from a renewed focus on its food proposition, including a greater emphasis on lower prices and a more effective adoption of technology to improve the customer experience.
“Meanwhile, the John Lewis retail arm is successfully drawing in customers through a combination of revitalised physical stores, a focus on meaningful brand partnerships, and the reintroduction of its Never Knowingly Undersold price matching strategy. The retailer is clearly thinking smart with its partnerships, tapping into the current nostalgia trend with the announcement that Topshop will return to UK high streets. Additionally, new collaborations with brands like Waterstones are designed not only to get the right products in-store, but also to increase dwell time and boost add-on sales.
“Wider market factors are likely at play in these results too. The recent M&S cyber-attack likely resulted in an unexpected windfall for John Lewis. With M&S’s online functions temporarily unavailable from April to June and stock on shelves significantly impacted, many consumers, particularly those in the overlapping target demographic, would have naturally turned to John Lewis as an alternative.
“The new packaging levy, higher National Insurance contributions alongside a deliberate increase in strategic investment saw John Lewis’ profits dip £3m in the first-half of the year. However, the picture is more stable than the headline suggests. On a like-for-like basis, profitability was broadly flat year-on-year – underlining that the core business remains resilient.
“With sales growth across both Waitrose and John Lewis, record customer satisfaction scores, and stronger cash generation, the Partnership looks well-placed to build on this momentum heading into the crucial second half of the year.
“As an employee-owned business, the question of a bonus for its partners will be a key point of interest when full year results come round. Given the current economic environment and existing cost pressures on households, it is likely the business will prioritise boosting everyday wages for its staff. This approach would bring longer-term security to the people who power the business, rather than a one-off bonus, particularly as pay growth slows across the wider economy.”
Zoe Mills, lead analyst at GlobalData, a leading data and analytics company, offers her view: “John Lewis has reported H1 growth for the first time since 2021, and these results are a clear win for the UK’s largest department store chain. This time last year, John Lewis announced a return to its roots with the reintroduction of its Never Knowingly Undersold (NKU) price promise, and this action has proved the correct direction to take in rejuvenating its proposition. Total trading sales rose 2.1% during the first half of FY2025/26, reflecting the competitive edge that it has secured now that it is better able to compete on price. Nevertheless, this has come at a detriment to profitability, and the operating profit margin slipped from -3.2% in the comparative period to -3.4%. Waitrose was able to pull the overall group into profit for the period, which gives some hope that it can return the Partnership Bonus as soon as next year.
“Technology has been the driving force for this stellar result, with technology sales rising 6.3% in H1, and here the NKU price promise is most relevant to shoppers. The department store has far outperformed electricals specialist Currys, which reported a 3% uplift for the UK & ROI for the 17 weeks to 30 August 2025. Given its more curated proposition compared to electrical specialists, John Lewis must ensure its staff are trained and able to offer expert guidance to shoppers to retain its appeal.
“John Lewis’ fashion department also performed well, with sales up 3.5% during the period. Yet, this is likely to have been spearheaded by its beauty division as it has invested in its beauty halls and introduced more brands to its portfolio. More brands are opening standalone stores in key city locations, and John Lewis should seek partnerships with new brands such as Pureseoul to enhance its proposition and highlight the benefits that a multi-brand offer can provide to shoppers looking for impartial beauty advice.
“The one negative for John Lewis this period has been its underperforming home proposition, with home sales declining by 1.6% in H1. This result compares poorly to the home segment, which we forecast to have grown by almost 2% in the first six months of 2025, indicating that the department store is losing ground in this segment. A shift in focus for its home proposition, dividing its range into more distinct styles, could prove beneficial as shoppers seek to personalise their homes with unique looks. John Lewis must focus its efforts on homewares as we enter the golden quarter, with this sector appealing to gifting shoppers in the run-up to the festive period.”
