The boss of John Lewis has warned that the UK economy is locked in a "permacrisis" as he urged the government not to raise business rates on large retailers.

Peter Ruis, the outgoing managing director of the retail giant, said British businesses are facing a "permacrisis externally [which] isn't going to go away".

His comments follow a warning last month from Jason Tarry, chair of John Lewis Partners – which owns the retailer and grocer Waitrose – who told staff the company is entering a period of "really tough" trading conditions.

Despite the challenging backdrop, Ruis said he was "pretty optimistic" that the retailer can manage external trading conditions to deliver a strong Christmas period. For retailers, the Christmas trading period is typically the most important stretch of the year, often determining whether a full year is profitable. He noted that the earlier timing of this year's Budget – at the end of October rather than November, as last year – will allow the retailer to focus on the critical end-of-year trading period.

"That critical period for us, where the big day out typically happens in John Lewis in those critical November weeks, getting past that Budget hump will be huge for us," he added.

Call to Avoid Business Rates Hike

Ruis urged the government not to hike business rates on large retailers, warning the rumoured tax rise would be "terrible" for the high street. It is "really, really critical" that Labour does not add to the business rates burden facing high streets, which he said is already "out of kilter".

Business rates – a property-based tax on non-domestic premises – are one of the biggest fixed costs for physical retailers, and the industry has long argued the tax disadvantages shops relative to online competitors that carry a lighter property footprint.

Retailers have said in recent days that they fear Andy Burnham could hike the highest business rates bill facing the largest retailers to pay for tax cuts for smaller shops, pubs and bars.

This tax change would have a "terrible impact for all retailers," Ruis said. "No-one wants those city centres, those town centres and those high streets [to have] closed shops.

"A lot of the smaller stores who won't be affected by it are also against it because they need people like us. John Lewis is the anchor to pretty much everywhere we are, and people drive into that town centre to visit us, and then visit everyone else as well."

It is "really, really critical" that the feared business rates hike "doesn't happen," he added.

A group of retailers including Tesco, Sainsbury's and Marks & Spencer warned earlier this week that the government could hike the highest business rates multiplier, which applies to stores with a value of more than £500,000. This rate currently stands at 50.8p.

Ruis appealed to the government to reform the business rates system rather than increase the burden on large retailers. Labour's 2024 manifesto included a pledge to "replace" the business rates regime.

"We believe passionately that reform of business rates will change the economy, change employment. […] We can invest in [high streets], invest in employment if we get that reform that's much needed," the John Lewis boss said.

Push to Reach Gen-Z Shoppers

Ruis said the retailer is investing in its social media appeal in a bid to reach more Gen-Z shoppers. On Thursday, John Lewis unveiled its new "year-round content studio" where it will produce podcasts and social media content.

The retailer hopes to rival the reach of its annual Christmas advert with its push into social video, as well as using the content to appeal to the AI chatbots being used by shoppers. The move reflects a broader shift in retail marketing, as a growing share of shopping research now takes place through social platforms and AI assistants rather than traditional search and advertising channels.

Peter Ruis announced his surprise departure as managing director last month, less than three years after taking the role. He will be replaced by former River Island boss Will Kernan.

Reflecting on his tenure, Ruis said: "If I look back over my three years, I think it's been all about our relevance as a brand and [the] incredible work [of] the team to deliver [the] sense [that] John Lewis is back, its mojo is back, the excitement is back."