John Lewis Partnership is preparing to reward numerous employees with an annual bonus, marking the first such payout in four years.
The company, known for operating John Lewis stores and Waitrose supermarkets, announced that its staff will receive a 2% bonus totaling approximately £35 million. This bonus is the first one granted to employees since 2022, a period marred by the closure of John Lewis shops and staff reductions due to the impact of the Covid pandemic. The company employs about 65,000 individuals.
The announcement coincides with John Lewis Partnership disclosing its latest financial results, revealing a 6% increase in profits before tax, bonuses, and exceptional items, reaching £134 million. Nevertheless, the company reported a pre-tax loss of £21 million, a significant decline from the £97 million profit recorded the previous year. The loss was attributed to write-downs associated with outdated technology systems and additional expenses stemming from tax changes implemented in April, including higher employer National Insurance contributions.
In terms of revenue, the company reported a 5% growth across its business, reaching £13.4 billion for the year. However, given the current “challenging macroeconomic environment,” the company expressed caution in its outlook for the ongoing financial year.
Jason Tarry, chairman of the John Lewis Partnership, expressed concerns about consumer sentiment, describing it as subdued and fragile. Despite this, the company observed a positive 7% growth in supermarket sales driven by volume increases amid a broader decline in market volumes. However, Tarry indicated that discretionary areas faced tougher conditions and emphasized the company’s cautious approach, particularly in light of recent geopolitical events.
Regarding supply chains, Tarry noted the absence of any noticeable impact from the recent conflict in the Gulf region and expressed confidence in the company’s ability to manage energy costs effectively through hedging strategies. He also highlighted the ongoing progress of the company’s major transformation initiative, involving an £800 million investment in its stores as part of a renewed focus on core retail operations.
Last month, the company decided to abandon plans for constructing approximately 10,000 rental properties due to escalating costs and market uncertainty. Tarry underscored the success of the company’s long-term investment strategy, citing growth in customer numbers and record levels of customer satisfaction.
Despite market challenges and increased taxes, the company remains committed to investing in its business, achieving growth in both cash flow and profits.