Staff bonuses cut as John Lewis embraces different working

Comment Martin Flanagan

Even a stately high street dowager like John Lewis Partnership is not immune to systemic change in the sector. The purveyor of sofas and groceries to Middle Britain has clutched digital and shopping-as-an-experiencenot-process maxim firmly to its bosom.

Business as usual was not an option, it says, and it has to be in the van of new thinking rather than risk brand damage by being a Johnnie Come Lately to the party.

The eponymous department store chain John Lewis and its supermarket business Waitrose gave warning a year ago that changing shopping habits, involving much use of handheld electronic devices both outside and within stores, and strong headwinds of consumer caution because of reduced spending power, meant it had to up its game rather than adopt what partnership chairman Sir Charlie Mayfield calls the “defensive crouch” position.

The latest annual financial figures bear witness. Like-for-like sales figures at both John Lewis and Waitrose up by meagre amounts. Underlying partnership profits down 22 per cent, a 4.5 per cent rise at the department stores overshadowed by a 32 per cent slide at Waitrose.

But systemic change – with John Lewis Partnership and retail generally seen to be probable increasing users of artificial intelligence – and competitive pressures have an attritional effect. There will be some blood.

The partnership emphasised yesterday that the right of its 85,000 “partners” to an annual financial bonus was not inalienable.

It cut the staff bonus for the fifth consecutive year, and, at 5 per cent of annual salary, it is at the lowest since 1954 – the last year of post-war food rationing in the UK,

John Lewis Partnership also made 1,400 workers redundant in 2017, and is not ruling further job losses as a ramification of the new electronic dynamic. There are 700 fewer managers than there were two years ago. Contracts with longer working hours are also a future template.

The outlook, says Mayfield, is for fewer jobs at the retailer, but better jobs, and better paid jobs. And that looks likely to include staff increasingly posting information about their company on their personal social media.

The high street, like many business sectors, is managing change.