// John Lewis boss Dame Sharon White warns inflation could hit double digits following Russia’s invasion of Ukraine
// White also defended the partnership’s decision to keep millions in business rates relief while reinstating a £46m bonus pot this month for its 80,000 staff
The boss of John Lewis and Waitrose has warned that inflation could hit double digits in the UK as Russia’s invasion of Ukraine exacerbates the soaring cost of living, with prices rising in the supply chain and on shelves.
The prediction from Dame Sharon White, comes with UK inflation ready at a 30-year high of 5.5%, and expected to rise to almost 8% in April, when household energy bills will soar by hundreds of pounds.
White said her big concern was that inflation would remain “more enduring than any of us expected” as the cost of energy keeps rising.
“We are seeing inflation we haven’t seen in 30 years,” said White, an economist who was the Treasury’s most senior civil servant before joining the employee-owned retailer on the BBC’s Radio 4 Today programme.
“Everything you can see in terms of energy prices from the impact of the Ukraine war suggests that we might well end up with double-digit inflation. My big worry is that it ends out being more enduring than anyone expects. So I think inflation is the big macroeconomic washout.”
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White said the combination of rising inflation and a fall in the number of people in the workforce was “a real double crunch”.
She has been spearheading a turnaround of the business which owns Waitrose as well as the department store chain and defended the partnership’s decision to keep millions in business rates relief despite most of its stores staying open and a surge in online orders during the pandemic.
The group reinstated a £46m bonus pot this month for its 80,000 staff after recording record full year sales despite deciding not to repay £58m in tax relief it accepted from the government to weather the worst of the pandemic two years ago.
“We kept that relief, that exemption from tax, we used that exactly for the purposes intended, which was to secure jobs and to avoid further restructuring,” she said.
“So I make no apologies for paying the bonus to partners who have worked their socks off over the last year.”
For the first time in 67 years, the partnership did not its partners a bonus in 2020 as the retailer was forced to close some stores after reporting a £517m loss.
“I have to think about what is the right thing to do for the business and it’s a purpose-led business. Do I think it’s the right thing to have used business rates relief for the purpose it was intended by the Government – to protect jobs and to protect the business from further restructuring? Absolutely.
“Do I think it’s the right thing that we’ve been able to pay a bonus to partners on the back of results? I feel very comfortable morally – yes, absolutely it was the right decision.”
She also said the business was continuing to look at its supply chain to see whether a ban on the sale of Russian goods across its stores could be extended to other products or suppliers.
“We have removed Russian vodka from Waitrose shelves and Russian-made pallets that go into outdoor pizza ovens [sold] in John Lewis,” she said. “Anything that is made in Russia is off the shelves. And then, because supply chains are really complicated, we are looking at whether there are other products we need to take off the shelves as well.”
Losses for the group narrowed to £26m, down from £517m a year earlier, when the pandemic resulted in its first annual loss.
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