John Lewis Partnership is preparing to distribute an annual bonus to numerous employees for the first time in four years. The company, which operates John Lewis stores and Waitrose supermarkets, announced that staff members will receive a 2% bonus totaling approximately £35 million.
This bonus marks the first time employees will receive such a benefit since 2022 when the Covid-19 pandemic forced John Lewis to close stores and reduce staff numbers. The company, with around 65,000 employees, disclosed that profits before tax, bonuses, and exceptional items increased by 6% to £134 million. However, it reported a pre-tax loss of £21 million, down from a profit of £97 million the previous year.
The company attributed the loss to write-downs associated with its outdated technology systems and additional expenses related to tax changes implemented last April, including higher employer National Insurance contributions.
Sales for the year across the business climbed by 5% to £13.4 billion. Despite this growth, the company expressed caution about the current financial year due to a challenging macroeconomic environment. Jason Tarry, chairman of the John Lewis Partnership, mentioned that consumer sentiment appears subdued and fragile.
In the supermarket sector, the company experienced a 7% growth in volumes compared to an overall market decline, indicating a positive trend. However, discretionary areas faced tougher conditions. The company remains cautious, especially considering recent geopolitical developments.
Mr. Tarry emphasized that the company’s supply chains have not been impacted by the recent conflict in Iran, and there are no immediate concerns regarding energy costs due to hedging strategies. He highlighted the progress in the company’s major transformation program, which involves an £800 million investment in store improvements and a renewed focus on the core retail business.
Notably, the company recently decided against constructing approximately 10,000 rental properties due to increased costs and market uncertainties. This build-to-rent initiative, initiated in 2020 under the previous chairwoman Dame Sharon White, was abandoned by the current leadership.
Mr. Tarry expressed satisfaction with the company’s long-term investment strategy, which has led to increased customer numbers and record satisfaction levels. Despite market challenges and tax hikes, the company remains committed to investing in the business to drive growth in cash flow and profits.