Tough times for retailer
John Lewis staff to receive 2% bonus as profits slump
Brutal times for department stores
John Lewis and Waitrose staff will get a 2% nominal bonus after the department store and supermarket group saw profits plunge 23% to £123 million.
There had been speculation that the bonus would be scrapped for the group’s 83,900 staff.
However, the group committed to paying a bonus despite figures coming in at the bottom of expectations.
The group announced that Waitrose stores at Helensburgh, Four Oaks in the West Midlands, and Waterlooville near Portsmouth will close as part of an overhaul of the business.
Former Ofcom boss Dame Sharon White, delivering her maiden financial results as chairman, said: “This is a weaker performance than we had hoped for, driven by significantly reduced profitability in John Lewis.
“Despite a solid performance in Waitrose, it is our third year of declining profit across the Partnership as a whole. This year we saw a one-off reduction in the value of our John Lewis shops of £123m, principally as a result of shops playing less of a role in driving online purchases. “
This year’s 2% bonus is down from 3% in 2019. It will amount to an average payout of about £360 and is the lowest since 1953, when there was no award.
Dame Sharon White: prudent
“Profits in 2019/20 were at the lower end of what we had forecast,” said Dame Sharon. “We are, therefore, awarding a bonus this year of 2%. I believe this is prudent and affordable and it recognises the contribution made by Partners working in the business today without creating risk for our future sustainability.
“The result is that we are able to continue to invest in our customers and pay down more of our debt.”
Dame Sharon faces a tough task to reshape the group’s balance sheet following a brutal year on the high street.
Profits plunged 45%to £160m in the year to January 2019.
John Lewis has also seen a dent to trading at its Edinburgh store as a result of the St James development which has disrupted customer access. The development is due to open in October, giving a boost to the Christmas trading period.
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