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 a 2% bonus for its staff, totaling approximately £35 million.
This bonus marks the first time employees will receive such an incentive since 2022 when the Covid pandemic forced John Lewis to close stores and reduce its workforce. With around 65,000 staff members, the company aims to boost morale and reward its workforce.
Despite challenges faced during the pandemic, John Lewis Partnership disclosed positive financial results. Profits before tax, bonus, and exceptional items increased by 6% to £134 million. However, the company reported a pre-tax loss of £21 million, a decrease from the £97 million profit recorded in the previous year.
The company attributed the loss to write-downs associated with outdated technology systems and additional expenses linked to tax changes introduced the prior April, including higher employer National Insurance contributions.
Sales across the business surged by 5% to £13.4 billion for the year, but the company expressed caution in its outlook for the current financial year due to the challenging macroeconomic environment. Jason Tarry, chairman of the John Lewis Partnership, mentioned that consumer sentiment remains subdued and fragile.
While supermarkets saw 7% growth driven by volume increases despite a broader market decline, discretionary areas faced greater challenges. The company remains vigilant, especially in light of recent geopolitical events.
Mr. Tarry emphasized that the company’s supply chains have not been impacted by recent geopolitical tensions and does not foresee immediate effects on energy costs due to hedging strategies. John Lewis Partnership is pleased with the progress of its major transformation program, which includes an £800 million investment in its retail operations.
In a strategic shift, the company abandoned plans to construct approximately 10,000 rental properties due to escalating costs and caution in the property market. This decision aligns with the company’s dedication to investing in its core retail business and enhancing customer experience.
Despite market challenges, tax changes, and a demanding peak season, the company chose to persist in its business investments, leading to cash and profit growth. The commitment to long-term customer satisfaction and brand growth has resulted in an increase in customer numbers and record-high satisfaction levels.