The boss of John Lewis has told staff it is grappling with ‘really tough’ trading conditions as it pursues its turnaround ambitions.

Jason Tarry, chairman of the department store chain that also owns Waitrose supermarkets, told the company’s internal magazine that the challenges will translate ‘into lower sales and higher costs’.

Tarry warned of a ‘subdued market’ and higher taxes – including a £40million rise in employer National Insurance Contributions and £13million in new packaging levies – back in March.

‘We have to adjust for an immediate future that we weren’t expecting even six months ago, let alone a couple of years ago,’ Tarry said, in remarks first reported by the FT.

The war in the Middle East has dampened consumer confidence amid fears that it will result in higher grocery and energy bills, while prices at petrol pumps have already soared.

A spokesman for the group added: ‘It’s no secret that trading conditions are challenging right now as people think carefully about their spending.’

The Partnership has decided to shut its bureau de change points in shops due to falling demand. 

The business was widely seen as having lost its way under former chairman Sharon White, while High Street rival Marks & Spencer won over shoppers.