John Lewis and Waitrose hand staff first bonus in 4 years (Image: Getty)
Workers at the John Lewis Partnership are poised to receive an annual bonus for the first time in four years following improved profitability as the high street retailer progressed further with its turnaround.
The retail giant, which operates John Lewis department stores and Waitrose supermarkets, announced its employees, whom it calls partners, will receive a 2% bonus for the year to January 31. The company, which employs approximately 65,000 partners, said the bonus payment amounts to roughly £35 million in total. It came as the business reported profits before tax, bonus and exceptional items climbed by 6% to £134 million.
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The retail giant said employees will receive a 2% bonus for the year to January 31 (Image: Getty)
However, it posted a pre-tax loss of £21 million, down from a £97 million profit a year earlier, after being hit by exceptional charges, including write-downs related to its legacy tech systems.
Profits were also affected by approximately £53 million of additional costs linked to tax changes introduced last April.
JLP said higher national insurance contributions, following an increase in rates and thresholds for payment, cost it around £40 million, whilst the new Extended Producer Responsibility packaging levy cost it £13 million.
Sales across the business increased by 5% to £13.4 billion for the year, with growth across both brands as it pressed ahead with its major turnaround strategy.
However, the company said it is “cautious” in its outlook for the current financial year amid a “challenging macroeconomic environment”. Jason Tarry, chairman of the John Lewis Partnership, told the Press Association that consumer sentiment “is definitely subdued and definitely fragile”.
He said: “In supermarkets, we have seen 7% growth on the back of volume growth despite a wider drop in volumes across the market, so that is positive. In discretionary areas, it is definitely tougher. We remain cautious and that was before the breakout of war in the Gulf.”
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Mr Tarry emphasised that the business had experienced no disruption to its supply chains from the recent conflict in Iran, and anticipates no immediate effect on energy expenses owing to hedging arrangements.
He underlined that the organisation is “pleased with the progress” achieved lately through its substantial transformation programme.
After the coronavirus outbreak, the partnership closed several John Lewis department stores and eliminated head office positions in an effort to strengthen its financial position.
Most recently, the firm committed £800 million throughout its retail outlets amid a renewed focus on its core retail business.
Last month, executives also abandoned the partnership’s proposals to construct approximately 10,000 rental homes in order to concentrate more intensively on retail.
It discontinued the build-to-rent aspirations introduced under former chairwoman Dame Sharon White in 2020, citing elevated expenses and uncertainty in the property sector.
Mr Tarry said: “Our multi-year plan to invest in customers and our brands for the long term is working; we have grown customer numbers and achieved record satisfaction.
“Despite a subdued market, a challenging lead into the crucial peak period and increased taxes, we took the decision to continue investing in the business, and have delivered cash and profit growth.”
