John Lewis pays first annual staff bonus in four years as profits rise | John Lewis

The owner of John Lewis and Waitrose has paid annual bonuses to workers for the first time in four years after underlying profits rose 6 per cent.

The retail group’s employees, whom it calls partners, will receive a 2% bonus after recording increases in sales and profits.

At 31 January sales rose 5% to £13.4bn and profits rose to £134m; That fell slightly short of expectations in what chairman Jason Tarry called a “subdued market.”

It said profits had fallen by £40m from additional national insurance contributions and £13m from new packaging duties. The company suffered a pre-tax loss of £21 million following one-off transactions, including the write-down of older technology. This compares with a profit of £97 million the year before.

The staff-owned group has not paid bonuses in four of the last five years after incurring losses during the Covid pandemic, when it was forced to close all stores during lockdowns.

Although the company tripled its annual profit last year, it chose not to distribute bonuses.

The retail group is in the midst of a turnaround plan that has seen 16 department stores and at least 20 Waitrose stores closed and thousands of head office staff made redundant.

Tarry said: “Our multi-year plan to invest in our customers and brands for the long term is working – we have increased our customer base and achieved record levels of satisfaction.

“Despite a subdued market, a difficult entry into the critical peak period and rising taxes, we decided to continue investing in the business and delivered cash and profit growth.”

Last summer the company stated in an internal update that staff could be eligible for bonuses if it exceeded its £200 million profit target. There were some workers signed an open letter I call on bosses to bring back the bonus.

At its peak in the 1980s, the retailer was paying annual bonuses of 24% of employee salaries.

The company is spending £800 million on its stores as part of a long-term investment. More than 20 Waitrose stores were refurbished last year, as well as five John Lewis stores.

John Lewis also launched its Topshop brand across all 32 stores last month as it looks to boost the appeal of its fashion floors.

Tarry also pulled the plug on the partnership’s long-term plan to build up to 10,000 rental properties to focus more on retail.