John Lewis Partnership staff have seen their annual bonus plummet to a 67-year low, as the retail group warns it will close some stores amid falling profits.
Publishing its unaudited financial results for the year ending 31 January yesterday, the largest employee-owned business in the UK said it would award staff a bonus of 2% of their salary – the lowest figure since 1953, when it paid no bonus.
All of the group’s 80,000 staff receive the same percentage pay-out each year, regardless of their role or seniority. Last year, staff were awarded a 3% bonus.
John Lewis Partnership chair Sharon White said: “I believe this is prudent and affordable and it recognises the contribution made by partners working in the business today without creating risk for our future sustainability. The result is that we are able to continue to invest in our customers and pay down more of our debt.
“With the hard work of partners, we made £123m of profit in 2019/20, which is 23% less than we made in 2018/19. This is a weaker performance than we had hoped for.”
According to a recent XpertHR survey of 131 organisations, 71.8% of organisations made bonus payments to at least some of their employees in 2019, while 11.3% awarded bonuses to all of their staff. Almost half (45.8%) planned to review their bonus schemes, while 14.5% were looking to improve the relationship between pay and performance.
John Lewis Partnership, which owns both John Lewis and Waitrose, said it would “slim down” its head office functions in the year ahead, and promote closer working between employees across both of its retail brands in order to cut costs.
Three Waitrose stores in Helensburgh, Four Oaks and Waterlooville will close and White said the company would support affected staff in finding alternative jobs internally.
“Every partner can make a difference this year by focusing relentlessly on service – wherever they are in the business. If we get it right, customers will return to shop with us and we’ll earn their lifelong loyalty,” added White.