John Lewis will not pay out an employee bonus despite a strong uplift in annual sales and profits, saying that it needs to invest further in its turnaround plan.
The employee-owned group, which includes the John Lewis department store chain and supermarket business Waitrose, posted a 73% increase in profit before tax to £97m in the year to 25 January. Sales rose 3% to £12.8bn, helped by Waitrose’s performance.
However, the retailer said it did not believe “it would be right” to pay a bonus this year as it continued to reinvest in the business to revive its fortunes, and considering that it increased pay by £114m earlier this year.
It is the fourth time in five years it has failed to pay the bonus.
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New chair Jason Tarry said: “These are solid results, which show that our customers are responding well to our investments.”
He told PA News that the company was “determined to pay a bonus as soon as we possibly can” but that “now just isn’t the right time”.
The company was not thought to have come up with any specific thresholds or criteria for reinstating the bonus.
The John Lewis Partnership employs about 69,000 people, and earlier this month it said shop workers would receive a 7.4% pay rise.
The series of freezes started in 2020 – the first time it had scrapped them since 1953 – after it was hit by Covid lockdown store closures.
John Lewis said that while it expected the economic environment to be “challenging for our customers and our business” in the year ahead, it was still confident it could push up profits.
Charles Allen, a Bloomberg Intelligence analyst, suggested new costs imposed by the last Budget were also in bosses’ minds. He told the BBC: “Although the partners don’t see it, you’ve got a very large rise in employer national insurance as well.”
John Lewis was one of the signatories of a letter to the government last year, which said the rise in employer national insurance contributions from April would make High Street job losses inevitable.
John Lewis has been trying to win back customers with a recovery plan after a tough few years that saw it cut jobs and close several stores.
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