John Lewis staff miss out on bonus as retailer slides to £78m loss
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The John Lewis Partnership has said it will not hand staff a bonus for only the second time since 1953 after the retail group fell to a hefty loss.
Bosses said the business will now increase cost-cutting efforts to complete a turnaround of the group’s financial performance.
The group, which runs the department store chain and Waitrose supermarket arm, recorded a £78 million loss before exceptional items for the year to January 28.
It represented a slump from a £181 million profit in the previous year, with John Lewis blaming “inflationary pressures”.
JLP recorded a £234 million pre-tax loss, once additional costs were taken into account, such as significant write-downs on its retail properties.
Chairwoman Dame Sharon White apologised to staff that they would not receive a bonus payment following a “tough set of results”.
In a letter to staff, Ms White said: “You’ve been exceptional in what has been another very tough year. Two years of pandemic and now a cost-of-living crisis.
“Inflation has had a big impact on the partnership and sent our costs soaring – up almost £180 million on last year.
“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.”
On Thursday, the retail group said it fell to the loss after customers bought less, with sales declining by 2% to £12.25 billion for the year.
Waitrose sales declined by 3% to £7.3 billion, while John Lewis recorded 0.2% growth to £4.94 billion.
The partnership said on Thursday that its plans to triple its cost savings target from £300 million to around £900 million by January 2026.
It said the increased savings are likely to include an extra £236 million from further “simplification”.
Previous simplification efforts included changes to its head office, which resulted in 1,500 jobs being cut by 2021.
JLP said it has come under significant pressure from rocketing inflation over the past year, reporting £179 million in extra operating costs as a result during the year.
The update came a day after the group appointed turnaround specialist Nish Kankiwala as its first chief executive, in a shake-up of the firm’s leadership structure.
