Despite a return to profit, for the second year running the John Lewis Partnership will not pay its staff a bonus.
The UK’s largest employee-owned retailer, which also owns Waitrose supermarkets, has reported a pre-tax annual profit of £56m compared with a £234m loss the year before.
However, it said that rather than pay a bonus the business was “best served by investing in our retail businesses and in partners’ base pay”. Plans are afoot to refurbish stores, open new sites and improve technical systems.
It is only the third time since 1953 that the group has not paid its now-74,000 “partners” an annual bonus. It previously did not pay the bonus in 2021 and 2023.
Although sales at Waitrose rose by 5% to £7.7bn, with a record number of customers, spending in John Lewis stores was down 4% to £4.8bn.
Last week the Partnership announced it would implement a 10% pay increase for their store workers, taking their hourly wage to £11.55, or £12.89 in London. However, in January, it signalled there would be further job losses over the next five years – with a reported 10% cut to personnel, accounting for around 11,000 positions being considered.
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Chair of John Lewis, Dame Sharon White, said the company had made “significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses; we expect profits to grow further this year.
“This shows our plan is working, while we know there’s much more to do. Our improved performance has been supported by our customers’ love for both brands, with more people choosing to shop with us than ever before, and our partners’ commitment to delivering excellent customer service.
She said the return to profit came after making £88m of savings, mainly by better matching staff hours to needs in Waitrose shops and also by cutting energy use and more automation in the John Lewis distribution network.
But Dame Sharon said suggestions John Lewis and Waitrose should split would not be good for the business. She told BBC’s Today programme the results showed their plan was working.
“We’ve got so many customers who shop across the two, love both, and the fact that we’re back to profit, the fact that customer numbers are growing, our debts are down, we’ve got the balance sheet and the firepower now to invest, you know, record levels over the next year.”
She said the turnaround was “a great testament to the fact that we are stronger together”.
In October, Dame Sharon said she would be stepping down from her position at the end of her five-year term in 2025. Her tenure as chair is the shortest in John Lewis’s near 100-year long history.
Earlier in 2023, reports suggested that the partnership was considering selling off a minority stake in the business, meaning it would no longer be fully-owned by its employees.
Dame Sharon later ruled out the move, but said the board could consider external investment in future if it was needed.
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