John Lewis loses £124m – what chance has your local shop?

Retail giant wobbles as Britain’s high streets face brutal winter

John Lewis and Waitrose are struggling despite having the brand, scale, buying power and resources most independent retailers can only dream of. Losses have reportedly jumped more than 40% to £124m as costs rise and nervous consumers rein in spending. If a retail institution this big is feeling the squeeze, Britain's small shops should be sounding the alarm.

JOHN LEWIS AND WAITROSE STRUGGLING

What chance is there for smaller retailers?

Losses up 40%, costs rising and shoppers nervous and broke. The Chancellor’s Budget must deliver relief for small retailers.

The latest results from the John Lewis Partnership paint a stark picture of UK retail. Losses widened by more than 40% in the first half of the year, rising to £124m, up from £88m last year, as the business battled higher operating costs and a sharp drop in consumer confidence. It’s a story of falling demand and rising costs of doing business.

If one of the UK’s most trusted retail brands, with scale, loyalty, and national reach all sorted, is struggling, the implications for small and micro retailers are even more serious.

WHAT THE JOHN LEWIS’ SAGA TELL US

John Lewis and Waitrose have:

• strong brand recognition

• diversified revenue streams

• national footprint

• sophisticated supply chains

• access to capital

• large customer bases

And yet they are still facing:

• falling footfall

• squeezed margins

• rising energy and logistics costs

• cautious consumers

• higher wage bills

• increased cost of borrowing

If the giants are wobbling, the smallest retailers are already on the edge.

THE REALITY

Small retailers don’t have the deep pockets of John Lewis or the bargaining power with suppliers. The big retailers have the ability to absorb cost shocks and the scale to spread risk alongside the brand loyalty to guarantee footfall yet they are facing the reality of shoppers cutting back on non‑essentials, in tandem with energy, rent, insurance, card fees, packaging, shipping, all rising faster than revenue.

For small and micro retailers any quiet day is a blow to cashflow and profits and they can’t raise prices without losing customers. Cashflow is fragile and one late payment can derail a small business completely.

Given the economic situation banks are cautious about lending and borrowing costs remain high. Big retailers can discount heavily to drive footfall, but their small competitors can’t.

BUDGET CRITICAL

The Chancellor has promised “breathing space” for businesses. Retailers, especially small and micro firms, need that breathing space now.

The Budget must address employer NI, wage pressures, and compliance costs are hitting small retailers hardest. Retailers also need predictable, affordable energy and an end to the current business rates system that punishes high‑street independents.

Small retailers are likely to need affordable credit to survive winter trading, especially if the festive season lets them down. They need households to be able again, otherwise retail recovery stalls.

Reducing the numbers of young people out of work would really help too as retailers will need additional people over the winter and retail is where young people traditionally get their start in the workforce.

THE FRONT LINE

When John Lewis posts a £124m loss, it is a warning. When small retailers face the same pressures, it becomes a crisis. Without a budget that cuts the costs of doing business, encourages recruitment and strengthens local retail economies more independents will close and the UK will lose the diversity, vibrancy and economic resilience that small retailers provide.

John Lewis and Waitrose are struggling even though they have scale, brand power and resources to cope. Small retailers don’t and if the Chancellor wants growth, he must support the businesses that keep Britain’s high streets alive. When the big retailers wobble, small retailers fall unless the Budget gives them the breathing space they desperately need.