Record sales at John Lewis have prompted the department store giant to restore its staff bonuses, albeit with the warning that the crisis in Ukraine will further impact the cost of living.
A £46mn pot will be shared between employees, equating to a 3 per cent bonus (one and a half week’s pay). A 2 per cent wage increase has also been pledged to help bring pay into line with inflation and following accusations from workers that the retailer was only paying them “poverty wages”.
The John Lewis group, which also owns Waitrose supermarket, reported underlying pre-tax profits of £181m in the year to January 29 following record sales of £4.9bn, up 8pc on the previous year.
When exceptional and one-off costs were taken into account the retail giant was still in the red, however, though its losses were greatly reduced from £517m in 2022 (the company’s first ever loss) to £26m in the latest accounts.
John Lewis scrapped its traditional company bonus for the first time since 1953 last year, as covid took its toll on the retail sector. Employees objected that they were being paid less than the £9.50 per hour real living wage (£10.85 in London) and last September started a petition which attracted almost 30,000 signatures.
Chairman Dame Sharon White, who is in charge of a major five-year turnaround plan at John Lewis Group, commented: “We see continued uncertainty from global events affecting the economic environment, our customers, partners and society. As inflation and energy prices rise, our customers face higher living costs. While this creates uncertainties as we look ahead, we remain focused on investing significantly in our Partnership Plan to transform and grow our business.”
The Group is urgently seeking a return to profitability before it has to refinance its multi billion-pound debts. Last July the company cut 1,000 jobs and oversaw a swathe of store closures. In the past month John Lewis dropped its famous Never Knowingly Undersold pledge after nearly 100 years, in the face of huge competition for the online market from Amazon and other rivals.
John Lewis has also pledged to remove Russian-made products such as vodka and a line in pizza oven pellets from its stores.