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John Lewis returns to profit but ditches bonus

John Lewis store in St James
John Lewis staff will forego a bonus for the second year (pic: Terry Murden / DB Media Services)

John Lewis Partnership has returned to profit but the department store and Waitrose supermarket chain will not pay its staff a bonus for the second year in a row.

The partnership reported a £42 million pre-tax profit before exceptionals compared with a £78m loss in the previous year. Including exceptionals, profits to £56 million compared with a £234m loss.

In January, John Lewis said it was planning to cut the size of its workforce over the next five years.

It said: “As employee-owners, we have a shared responsibility to ensure the Partnership is sustainable into the long-term.

“We’ve consistently said that at this point in our transformation, this is best served by investing in our retail businesses and in partners’ base pay. So after careful consideration we do not believe it would be right to award a Partnership Bonus this year.

“We are increasing overall pay by £116m in 2024 – a record investment.”

Yanmei Tang, Analyst at Third Bridge, said John Lewis is likely to face further challenges ahead, and may be forced to close stores, despite the return to profitability.

Tang said: “The department store industry continues to struggle amid a cost-of-living crisis. Our experts say John Lewis, with its significant reliance on home sales for revenue, may face even greater challenges ahead. The persistently sluggish housing market is unlikely to provide any relief.

“Expectations are for more store closures as they adjust their footprint, with increased investment in key locations. Despite this, our experts say John Lewis’ strong online presence means that while store closures may occur, sales are likely to shift online rather than being lost entirely.”

See also:

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