John Lewis Partnership to cut staff year-end bonus
The John Lewis Partnership is to cut its staff year-end bonus despite posting a 21.2% increase in annual profits.
The company is reducing the bonus to 6% of salary. This compares to 10% in the previous year.
In a statement, John Lewis Partnership chairman Sir Charlie Mayfield said the bonus was lower because the company had decided to retain more of its annual profits to strengthen its balance sheet.
He added: “This allows us to maintain our level of investment in the face of what we expect to be an increasingly uncertain market this year, while absorbing the costs associated with adapting the Partnership for the future.”
In the year to 28 January, pre-tax profit before bonus and exceptional items across the Partnership, which includes John Lewis and Waitrose, climbed to £370.4 million. Partnership gross sales rose by 3.2% to £11.37 billion year-on-year while revenue was up 2.8% to £10.03 billion.
At Waitrose, gross sales were up 2.7% to £6.63 billion as the supermarket grew its market share and customer numbers. Although like-for-like sales decreased by 0.2% overall, these improved in the second half of the year
Meanwhile, gross sales were up 4% to £4.74 billion at the John Lewis department stores, with like-for-like sales growth of 2.7%. Customer numbers increased by 2.7% to 12.1 million.
Looking at current trading, the company said Waitrose’s like-for-like sales were down 1.4% in the first five weeks of the current financial year. John Lewis like-for-likes also edged down 1.4%.
Mayfield said the company expects trading pressures resulting from changes in the retail sector to continue in the year ahead.
He added: “The two major influences are pricing, where the rate of change in selling prices is likely to be significantly slower than the rate of change in input costs as a result of weakness in the Sterling exchange rate, and the continued shift from shops to online. These factors are significant for the outlook where we expect both inflationary cost pressures and competition to intensify in the market as a whole.
“In addition, we expect our short-term profits to be impacted by significant one-off costs of change as we accelerate aspects of our strategy to ensure the Partnership’s success. However, we start from a position of strength and our plans will navigate the Partnership through the uncertainty in the year ahead.”
