John Lewis has reinstated its staff bonus package after the business delivered rising sales and profits this year.
The department store retailer recorded a profit before exceptional items of £181m in the year to January 29, up 38% compared with the previous year and 111% on two years ago.
This meant the business achieved its minimum threshold of £150m so it has restored its staff bonus of 3% to all partners, while the executive team donated their bonuses to the British Red Cross.
Including exceptional items and the bonus, John Lewis registered a loss before tax of £26m – 95% better year on year and 118% better on a two-year basis.
The retailer said exceptional costs included “restructuring costs, property lease exit costs and a small write-down of John Lewis stores”.
The John Lewis arm of the business recorded its highest sales in history, up 7% year on year on a like-for-like basis to £4.9m.
Waitrose, meanwhile, achieved a 1% rise in like-for-likes over the year – up 11% on two years ago.
John Lewis said cutting costs will continue to be a key priority, including the reduction of management roles, store closures and the closure of a delivery hub.
The business has, however, pledged to increase pay to be in line with the real living wage, upping it by 2% for all colleagues.
Going forward, John Lewis chair Sharon White said the business will invest £119m into John Lewis shops, digital services and distribution capabilities, as well as £500m in creating “everyday value” for customers, including a revamped loyalty scheme.
Waitrose stores will also be refurbished with an investment of £55m, plus £72m into its digital and distribution services.
White said in a statement: “We have made a good start to our Partnership Plan but are only one year through our five-year transformation. Looking ahead, 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.
“This is a year of opportunity for the Partnership, despite economic headwinds. We have come through so much already and our solidarity will continue to carry us through.
“I am confident that by continuing to invest in our strategy we will deliver for our customers, Partners, suppliers and communities.”
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