John Lewis staff braced for cuts as losses mount
John Lewis Partnership staff are being warned of job losses after the company posted an annual loss of £234m.
Staff at he employee-owned company, which includes the Waitrose supermarkets chain, have already been told there will be no annual bonus payment. It is only the second time it has not been paid since 1953, the last time being in 2020.
“As we need to become more efficient and productive, that will have an impact on our number of partners. That’s a massive regret to me personally,” said chairwoman Sharon White.
“I am sorry that the loss means we won’t be able to share a bonus this year or do as much as we would like on pay.”
A loss of £78m was recorded for the financial year which ended in January but hit £234m when exceptional costs were included, such as the writedown in value of Waitrose stores. This compared to loss of £27m the previous year. Ms White put the blame largely on a £180m surge in costs.
However, there was also a change in shopping habits. Waitrose sales fell by 3% to £7.3billion, while John Lewis recorded 0.2% growth to £4.94bn. The supermarket business attracted 800,000 more customers, but each had spent less. The size of the average basket shrank by 15% and shoppers purchased cheaper items.
Customers were also buying less online as the pandemic era growth was reversed, said the company.
Ms White emphasised that the company balance sheet remained strong with £1bn of cash and access to a £420m credit facility.
However, the group revealed it had raised its cost efficiency plan from £300m to £900mi by January 2026.
“The mantra for the year is cost out, margins up and customer focus,” Ms White said.
The increased savings are likely to include an extra £236million from further ‘simplification’. Previous simplification efforts included changes to its head office, which resulted in 1,500 jobs being axed by 2021.
A total of £32m was spent supporting partners with a cost of living payment and free food over winter, said the company. Staff received a £500 pro rata cost of living payment as well as free food.