The John Lewis Partnership (JLP) has announced a 73% increase in annual profits but has decided not to give a staff bonus for the third consecutive year.
The employee-owned company, which operates John Lewis department stores and Waitrose supermarkets, reported earnings of £97 million for the 12 months ending in January, up from £56 million in the previous year.
Group sales grew by 3% to £12.8 billion, driven by Waitrose, as the department store chain reinstated its ‘Never Knowingly Undersold’ price promise that was removed in 2022.
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New chair Jason Tarry has indicated a further investment of £600 million in operations following the improved profit performance, prioritizing regular pay for staff, known as partners, over a one-time reward.
An increase of 7.4% in wages was announced earlier this month as the company aimed to enhance retention amidst the lack of annual bonuses, with only one being paid out in the last five years.
This past financial year marked only the fourth instance since 1953 where JLP did not grant a bonus.
Mr. Tarry, who took over from Dame Sharon White six months ago as part of a post-pandemic restructuring plan involving store closures and job cuts, stated that careful consideration was given to the decision regarding the bonus.
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Speaking to the company’s 69,000 partners, he said, «These are solid results, demonstrating that our customers are responding positively to our investments in quality products, value, and service.
«We have made significant progress with much more to accomplish.
«Looking ahead, I see substantial potential for growth from both our Waitrose and John Lewis brands.
«Our focus will be on enhancing the unique aspects that make these brands special for our customers.
«This will entail substantial investment in our stores and supply chain.»
Mr. Tarry later mentioned to the PA news agency that he could not ensure the return of a bonus in the current financial year due to the challenging economic environment for both customers and the business.
JLP is expected to face a £45 million impact from the upcoming increase in employer national insurance contributions.
Mr. Tarry clarified that the impact would be managed through cost savings and growth rather than price hikes.