John Lewis Partnership axes staff bonus after posting half year loss
The John Lewis Partnership will not be paying a staff bonus for the first time since 1953 after the business was impacted by Covid-19 store closures this year.
The owner of the Waitrose supermarket and the John Lewis department store posted a £635 million loss in the six months to 25 July, although sales were 1% higher than last year. When exceptional items were excluded the loss amounted to £55 million.
The partnership was hit by £50 million worth of costs relating to the Coronavirus pandemic and by customers spending more on less profitable lines such as laptops and toilet rolls.
Sales at the John Lewis department store chain were down 10% in the period despite online sales climbing by 73%. Online now accounts for more than 60% of sales at the business compared to 40% before the pandemic. However, the partnership said sales momentum is starting to build in reopened stores with sales down around 30% on last year which is ahead of expectations.
Meanwhile, like-for-like sales at Waitrose rose by almost 10% with demand for online shopping remaining strong.
Looking ahead to the second half, the partnership said the outlook is uncertain but said it now believes the most likely outcome will be a small loss or a small profit for its full year.
During the period, the partnership announced that it would not be reopening eight John Lewis stores after their lockdown closures and yesterday said it is planning to close three Waitrose stores in Ipswich, Caldicot and Shrewsbury. It will also be selling its Wolverhampton shop to Tesco.
Speaking about the decision to not pay a bonus this year, John Lewis chairman Sharon White said “I know this will come as a blow to partners who have worked so hard this year. The decision in no way detracts from the commitment and dedication that you have shown.
“The partnership found itself in a similar position in 1948 when the bonus was halted following the Second World War. We came through then to be even stronger than before and we will do so again.”
