John Lewis highlights EPR packaging levy in increased first-half losses

The John Lewis Partnership has reported that its losses for the first half of the year nearly tripled, with waste packaging costs under the government’s Extended Producer Responsibility (EPR) scheme cited as a significant factor.

Losses before tax and exceptional items rose to £88 million, compared with £30 million during the same period last year. The partnership, which owns both John Lewis department stores and Waitrose supermarkets, said it spent £29 million in the six months to 26 July on a combination of packaging-related costs under the EPR scheme and higher employer National Insurance contributions.

The EPR system, introduced earlier this year, shifts the financial burden of packaging waste management from local authorities to producers and retailers. The John Lewis Partnership confirmed that around half of the £29 million cost was directly linked to packaging levies.

The Bank of England has previously estimated that the EPR charge could add up to 0.5% to food prices if fully passed on to consumers, highlighting the potential knock-on effects for the retail sector.

Chair Jason Tarry acknowledged the pressures facing the business, stating that consumer confidence remains subdued ahead of the government’s upcoming Budget. However, he expressed confidence that strong trading during the Christmas period would support a return to profit for the full year.

The introduction of the EPR levy has been flagged by industry as a significant new cost pressure for retailers and producers, with further financial impacts expected as the scheme rolls out fully.