John Lewis back in profit but no staff bonuses yet
The John Lewis and Waitrose retail group has returned to profit after three years of losses – but will not restore its workers’ annual bonus.
The retailer reported pre-tax profits of £56m for the year to 27 January, against losses of £234m in the previous year.
However, it said that after “careful consideration” it would not pay its workers an annual bonus for the second year running. It is instead increasing overall pay for employees by a record £116m.
The John Lewis Partnership (JLP) is employee-owned by permanent staff, known as partners, who typically receive an annual bonus payment. It is the third time since 1953 that this has not been paid.
Dame Sharon White, the JLP’s outgoing chair, defended the decision, saying: “The great thing about the partnership, and we are the biggest employer in business in the UK, is we can take a long-term view.
“We are really prioritising ensuring we invest in customers but also investing in pay for partners. So this year we are investing £116m in pay, which is a record level.”
The group plans to increase investment by 70 per cent to £542m, including by refurbishing 80 Waitrose stores, opening new supermarkets in some areas, upgrading the John Lewis website and improving customer service for shoppers in its department stores.
Sales at Waitrose rose 5 per cent to £7.7bn despite it being the most expensive grocer last year, with an average grocery basket costing £20 more than at Aldi, the cheapest, according to Which? research.
Record numbers of customers chose to shop at Waitrose, the group said. Overall, the supermarket and John Lewis gained up to one million new customers last year, taking the total to 22.6 million.
Dame Sharon dismissed growing speculation that the retail group would split. “What the results show is that the plan is working,” she said.
“The brands are stronger together. We’ve got so many customers who shop across the two, love both; we’ve got the balance sheet and the firepower now to invest next year.”