John Lewis has experienced a surge in profits but has announced that its staff will not receive a bonus for the third consecutive year. The retailer, which is employee-owned and includes the Waitrose supermarket chain, reported a 73% increase in annual profits, reaching £97m. Despite this positive financial growth, the decision was made to prioritize investments in the business and workers’ pay over reinstating the staff bonus.
This marks the fourth time in the past five years that John Lewis has opted not to pay a bonus to its employees. The trend began in 2020 when the company faced financial challenges due to Covid lockdown store closures, resulting in the first bonus freeze since 1953. The new chairman, Jason Tarry, emphasized the importance of eventually reinstating the bonus, stating that the timing is not currently conducive to such a move. The lack of specific criteria for reintroducing the bonus was also noted by a company source.
Despite the absence of a staff bonus, Waitrose, a part of the John Lewis Partnership, experienced a sales growth of 4.4%, reaching £8bn, largely driven by increased sales of own-brand products. Looking ahead, John Lewis remains confident in its ability to increase profits in an economic environment that is anticipated to pose challenges for both customers and the business. The company is working towards enticing back customers through a recovery plan following a period of job cuts and store closures in recent years.
Charles Allen, an analyst at Bloomberg Intelligence, highlighted that the decision to withhold the bonus was expected, particularly in light of upcoming increases in the minimum wage and employer National Insurance contributions. John Lewis had previously expressed concerns regarding the rise in employer National Insurance contributions and its potential impact on job losses in the retail sector. Despite the financial constraints, John Lewis is striving to navigate through these challenges and rebuild its relationship with customers through strategic initiatives
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