John Lewis Partnership is preparing to distribute an annual bonus to numerous employees for the first time in four years. The company, which oversees John Lewis stores and Waitrose supermarkets, has announced a 2% bonus for its staff, totaling approximately £35 million.
This bonus marks the first time employees will receive such a benefit since 2022 when the Covid pandemic forced John Lewis to close stores and reduce its workforce, which currently consists of around 65,000 members.
In its latest financial report, John Lewis Partnership disclosed that profits before tax, bonuses, and exceptional items increased by 6% to £134 million. However, the company reported a pre-tax loss of £21 million, a significant decline from the £97 million profit recorded the previous year.
The company attributed this loss to write-downs associated with outdated tech systems and additional expenses related to tax adjustments implemented last April, including higher employer National Insurance contributions.
Despite these setbacks, the company’s overall sales rose by 5% to £13.4 billion for the year. John Lewis Partnership expressed caution regarding the current financial year outlook due to a challenging macroeconomic environment.
Jason Tarry, the chairman of the John Lewis Partnership, stated that consumer sentiment is subdued and fragile. He noted that while supermarkets saw 7% growth driven by volume increases amidst a broader market decline, discretionary sectors face tougher conditions. Tarry emphasized the company’s cautious approach, particularly in light of recent geopolitical tensions.
Additionally, Tarry highlighted the company’s resilience to supply chain disruptions caused by the Iran conflict and its stable energy costs due to hedging strategies. He commended the progress made in the company’s major transformation program, which includes an £800 million investment in store enhancements and a renewed focus on core retail operations.
In a strategic shift, the company recently abandoned plans to construct approximately 10,000 rental properties, citing escalating costs and market uncertainties. This decision marked a departure from former chairwoman Dame Sharon White’s build-to-rent initiative launched in 2020.
Tarry expressed satisfaction with the company’s long-term investment strategy, which has led to increased customer engagement and record levels of customer satisfaction. Despite market challenges and tax hikes, the company remains committed to business growth through continued investments in customer experience and operational excellence.