John Lewis Partnership to Award First Staff Bonus Since 2022
The John Lewis Partnership has announced it will pay a staff bonus for the first time in four years, benefiting thousands of employees across its John Lewis department stores and Waitrose supermarkets. The 2% bonus, equivalent to approximately £35 million, marks a significant milestone after a hiatus since 2022, when the Covid-19 pandemic forced shop closures and staff reductions.
Financial Performance and Outlook
This decision comes as the company revealed its latest financial results, showing a 6% increase in profits before tax, bonus, and exceptional items to £134 million. However, the retailer reported a pre-tax loss of £21 million, a sharp decline from a £97 million profit the previous year. The loss was attributed to write-downs from outdated technology systems and additional costs due to tax changes implemented last April, including higher employer National Insurance contributions.
Sales across the business rose by 5% to £13.4 billion for the year. Despite this growth, the company expressed a cautious outlook for the current financial year, citing a challenging macroeconomic environment. Jason Tarry, chairman of the John Lewis Partnership, noted that consumer sentiment remains subdued and fragile, with tougher conditions in discretionary spending areas.
Strategic Investments and Market Challenges
Mr. Tarry highlighted that Waitrose supermarkets achieved 7% growth despite a broader market decline in volumes, while discretionary sectors faced more significant pressures. He also mentioned that recent geopolitical tensions, such as the war in the Gulf, have not impacted supply chains or energy costs in the short term due to hedging strategies.
The company is investing £800 million in its stores as part of a renewed focus on its core retail business and a major transformation programme. Last month, John Lewis abandoned plans to build around 10,000 rental properties, citing higher costs and caution in the property market, a project initiated under former chairwoman Dame Sharon White in 2020.
Employee Impact and Future Plans
With approximately 65,000 employees, the bonus payout reflects the company's commitment to rewarding staff amid ongoing challenges. Mr. Tarry emphasised that the multi-year investment plan in customers and brands is yielding positive results, including growing customer numbers and record satisfaction levels. He stated that despite market headwinds and increased taxes, the decision to continue investing in the business has led to cash and profit growth.
This move signals a step forward for the retailer as it navigates economic uncertainties while striving to maintain employee morale and operational stability.
