The John Lewis Partnership posted an £89m pre-tax loss for the 26 weeks ending 1 August 2026, up from £34m a year earlier – yet it is pressing ahead with a loyalty and digital investment push spanning both brands.

Partnership sales grew 2% to £6.3bn over the period. The company blamed the heatwave, a "difficult economic environment" and low customer willingness to buy general merchandise and big-ticket items, particularly at John Lewis.

On a call presenting interim results on 10 September, Waitrose managing director Tom Denyard told Marketing Week the business is "in the process of starting to build a loyalty offer" that will give both brands "really exciting new capabilities in the future". The pan-partnership loyalty scheme was first floated three years ago.

The tough trading climate has already forced the partnership to "simplify" head office structures. Chairman Jason Tarry reportedly warned staff in an internal employee magazine last month that worsening conditions are putting pressure on profits. He nonetheless told media he is confident "all profit" will be earned in the second half. Brand investment rose 29% in H1 to £246m as store modernisation stepped up.

Wins for Waitrose

Waitrose grew sales 4% to £4.3bn, though adjusted operating profit fell £7m to £103m – a decline the company attributed to investments in value and loyalty.

Those investments are showing returns on the customer side. According to the results release, spending on loyalty and lower prices lifted the Net Promoter Score for Waitrose's loyalty offer by 20 points year on year. The grocer invested an extra £20m in permanent price cuts in H1, with further investment later in the year set to take total price investment since 2023 to £180m.

Denyard said the "bedrock" to loyalty is "having an outstanding core proposition", with Waitrose also "reinvesting" in its store estate, quality and new product development. "You have to make sure customers, whenever they experience the Waitrose brand, get a consistent and a consistently brilliant experience," he said, adding that "brand consideration has never been higher".

The Little Treats loyalty mechanic is performing "really well": more than 10 million treats have been given away since launch 10 months ago, at a rate of "one every three seconds" for engaged customers.

"We're seeing it have quite a significant positive halo effect on volume for the business and the frequency with which customers shop with us," Denyard explained. "We've also done a good job through Little Treats of increasing membership of our loyalty scheme and through that capturing more customer data, and making sure we can – through that data – better personalise the offers that come through the My Waitrose card, so it's becoming a really nice flywheel and virtuous circle for us."

Social, digital and AI readiness

Denyard called digital and social a "big focus" attracting an increasing share of marketing mix investment. The Dish podcast passed 1 billion downloads this year, and the influencer-led YouTube series Let's Cook launched in June. Marketers are also structuring content so large language models can read it, ensuring Waitrose content surfaces in AI recommendations. "Our market mix modelling would suggest that's an area where we've got potential to invest further," he said.

Waitrose's cinematic 'Gastronaut' campaign, launched at the start of the year, is the highest-rated supermarket brand advert outside Christmas in independent consumer testing, according to Denyard, who cited YouGov research showing "the highest average level of positive conversation about Waitrose in a decade".

The 'Home of Food Lovers' strategy is also "resonating with customers": Waitrose No.1 range sales rose 15% and online sales grew 11%. Looking ahead, Denyard said he is "really excited for the second half of the year", as the brand "comes to life at Christmas" with new ranges landing in stores.

John Lewis lags

John Lewis fared worse, with sales down 2% to £2bn and an adjusted operating loss of £83m, versus £53m last year. Beyond the economy, the company cited "more targeted promotional and clearance activity" as a drag on performance.

Tarry said the gap reflects John Lewis being "in the earlier stages of its transformation", with more digital, online and in-store investment to come. The 'Never Knowingly Undersold' proposition, reinstated in September 2024, continues to "reinforce" the retailer's "commitment to quality service and competitive value", and remains the main focus. My John Lewis loyalty membership grew 10%.

Like Waitrose, the department store is pushing into social content, launching the 'Gift List' vodcast last week and The Box content creation studio ahead of Christmas.

"We see significant headroom in being able to engage with customers in that way, particularly with certain themes, particularly around gifting. And we also have been investing more in social and digital channels to get our brand to the customers more frequently," Tarry said.

Source: Marketing Week (https://www.marketingweek.com/john-lewis-waitrose-losses-loyalty-digital/)