John Lewis Partnership hands staff bonus for first time in four years

Workers at the John Lewis Partnership are set to receive an annual bonus for the first time in four years on the back of stronger profit as the high street firm progressed further with its turnaround.

The retail firm, which runs John Lewis department stores and Waitrose supermarkets, said its employees – which it calls partners – will receive a 2% bonus for the year to January 31.

The company, which employs around 65,000 partners, said the bonus payment equates to around £35 million in total.

It came as the business said pretax profit, before bonus and exceptional items rose by 6% to £134 million.

But it reported a pretax loss of £21 million, narrowing from a £97 million profit a year earlier, after being impacted by exceptional charges such as write-downs linked to its legacy tech systems.

Profit was also hit by around £53 million of extra 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, while the new extended producer responsibility packaging levy cost it £13 million.

Sales across the business rose by 5% to £13.4 billion for the year, with growth across both brands as it pushed forwards 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, chair 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.’

Tarry highlighted that the company had not seen an impact from the recent war in Iran on its supply chains, and is not expecting any short-term impact on its energy costs due to hedging.

He stressed that the group is ‘pleased with the progress’ made recently in its major transformation programme.

Following the coronavirus pandemic, the group shut a number of John Lewis department stores and cut head office jobs in a bid to shore up its finances.

More recently, the company is currently investing £800 million across its stores amid a renewed focus on its core retail business.

Last month, bosses also pulled the plug on the partnership’s plans to build around 10,000 rental properties in order to focus further on retail.

It abandoned the build-to-rent ambitions launched under previous Chair Sharon White in 2020, blaming higher costs and caution in the property market.

Tarry added: ‘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.’

By Henry Saker-Clark, Press Association Deputy Business Editor

source: PA

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