John Lewis won’t pay an employee bonus, despite the fact that its annual sales and profits have increased. The company says it must invest more in its turnaround plan.
The employee-owned group that includes John Lewis department stores and Waitrose supermarkets posted a 73% rise in profit before taxes to PS97m for the year ending 25 January. Waitrose helped boost sales by 3%, to PS12.8bn.
The retailer, however, said that it “would not be right” to give a bonus to its employees this year, as they continue to invest in their business to restore its fortunes and have already increased their pay by PS114m this year.
The bonus has not been paid for the fourth time in the last five years.
Jason Tarry, the new chair of the board, said: “These results are solid and show that our customers have responded well to our investment.”
He told PA News the company is “determined to pay out a bonus as quickly as possible” but “now isn’t the time”.
It was believed that the company had not set any thresholds or criteria to reinstate the bonus.
John Lewis Partnership, which employs approximately 69,000 people announced earlier this month that shop workers will receive a 7.4% wage increase.
After Covid’s lockdown stores closed, the series of freezes began in 2020. This was the first time since 1953 that it had done so.
John Lewis stated that it expects the economy to be “challenging” for its customers and business in the coming year, but it is still confident of increasing profits.
Charles Allen, an analyst at Bloomberg Intelligence, said that new costs introduced by the previous Budget were also on the minds of bosses. He told BBC: “Even though partners don’t notice it, there’s a large increase in employer national security.”
John Lewis signed a letter last year to the government stating that the increase in employer contributions for national insurance from April will lead to job losses on the High Street.
John Lewis is trying to win customers back with a recovery program after a difficult few years in which it had to cut jobs and shut down several stores.
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