John Lewis Partnership staff to face bonus slash amid profit plunge

14846
John Lewis annual bonus
// John Lewis Partnership expects its staff to face an annual bonus slash in full-year results in the coming days
// The business is currently facing a challenging trading condition
// Waitrose will lose 20 year contract with Ocado

John Lewis Partnership employees are expected to face an annual bonus slash next week as the company reports a sharp drop in its full year profits.

Details on the bonus will be revealed when the partnership reports its full year results this week.

The parent company of Waitrose and John Lewis warned in January that an axe in the bonus is expected for the first time since 1953 amid challenging trading conditions in UK retail.

“They could still afford to pay a three per cent bonus – which would cost circa £45 million – but they have softened the staff up for nothing,” independent retail analyst Nick Bubb said.

John Lewis Partnership chairman Sir Charlie Mayfield, who is expected to resign next year, said in January that the board would need to consider carefully whether “payment of a bonus is prudent in the light of business and economic prospects”.

Meanwhile, Waitrose is expected to lose its 20-year contract with Ocado next year after the online grocer struck a new deal with Marks & Spencer last week.

“We are in a very unusual economic and political circumstances,” Mayfield said.

“It all comes down to a judgement on what is best for the partnership.

“No one is getting rid of the bonus, bonuses go up and down. It’s affordable but the board needs to decide if it’s prudent.”

Bubb said the partnership could expect a 40 per cent plunge in annual pre-tax profits to £172 million.

However, Waitrose is expecting its operating profits to grow from £172 million to just under £200 million.

Click here to sign up to Retail Gazette‘s free daily email newsletter