John Lewis Partnership is preparing to award numerous employees with an annual bonus for the first time in four years. The company, overseeing John Lewis stores and Waitrose supermarkets, announced a 2% bonus for its staff, amounting to approximately £35 million.
This marks the first bonus distribution to staff since 2022, following shop closures and staff reductions during the Covid pandemic. With around 65,000 employees, the company disclosed that profits before tax, bonus, and exceptional items increased by 6% to £134 million. However, it reported a pre-tax loss of £21 million, compared to a £97 million profit in the previous year.
Factors contributing to the reported loss include write-downs associated with outdated tech systems and additional expenses due to tax adjustments implemented last April, such as increased employer National Insurance contributions. Sales for the year across the business grew by 5% to £13.4 billion. Despite this growth, the company remains cautious due to the challenging economic climate.
Jason Tarry, chairman of the John Lewis Partnership, emphasized the subdued and fragile consumer sentiment. While supermarkets saw a 7% growth driven by volume increases amidst a broader market decline, discretionary spending areas faced greater challenges. Tarry expressed caution, particularly in light of recent geopolitical developments.
Addressing concerns about supply chain disruptions from the conflict in Iran, Tarry reassured that the company has not experienced any impacts and does not anticipate immediate effects on energy costs due to hedging strategies. Highlighting progress in their transformation program, the company is investing £800 million across its stores with a renewed focus on core retail operations.
Recent decisions included abandoning plans to construct approximately 10,000 rental properties due to elevated costs and property market uncertainties. Tarry noted the success of their long-term investment plan in customers and brands, resulting in increased customer numbers and record satisfaction levels. Despite market challenges and increased taxes, the company remains committed to business investments, achieving growth in cash and profits.