// John Lewis Partnership to give staff 2% bonus
// The average worker would get around £360
// Operating profit for the group dropped 23% to £123m in the year to January 2019
John Lewis Partnership has said its staff will get a token bonus as new boss Dame Sharon White unveils the group’s financial results.
The partnership is due to hand workers a bonus equivalent to two per cent of salary, down from three per cent last year.
This means the average worker would get around £360.
- John Lewis to launch strategic review amid expectations of dismal results
- Waitrose rolls out first coupons to customers since John Lewis merger
The news comes after speculations that White – who became chair of the parent company of John Lewis and Waitrose last month – would scrap pay-outs for the group’s 83,900 staff.
However, a bonus of two per cent remains the lowest amount since 1953, when staff received no award.
In its full year trading update for the 52 weeks ending January 25, John Lewis Partnership’s operating profits dropped by 23 per cent year-on-year to £123 million, while pre-tax profit suffered a 25 per cent year-on-tear decline to £146 million.
Meanwhile, revenues declined 1.6 per cent year-on-year to £10.15 billion.
White said this was a “significantly weaker performance” than what was hoped for, and attributed it to the “reduced profitability” of John Lewis – although Waitrose enjoyed a “solid performance”.
John Lewis’ full year operating profits declined from £75 million to £40 million, driven by weaker sales in home and electricals, IT investment and growth in non-management staff pay ahead of inflation.
White added that there was a one-off reduction in the value of John Lewis shops of £123 million, principally as a result of shops playing less of a role in driving online purchases.
On the other hand, Waitrose’s full year operating profits grew from £10 million to £213 million.
As part of its Future Partnership strategy, first announced in October, the John Lewis Partnership’s head office functions will now operate under one umbrella – rather than separate teams for John Lewis and Waitrose – which has resulted in scores of job cuts.
While White reinforced the Future Partnership strategy in the full year trading update, she also went further to say that a strategic review of the business to address the third consecutive year of profit decline will be launched.
White said the strategic review will involve “right sizing” the store estate across John Lewis and Waitrose through a combination of new formats and new locations, repurposing and space reductions of existing stores, and closures where necessary.
While full details of the strategic review are expected to be revealed in due course, the partnership confirmed that it would start off by closing down three Waitrose stores later this year in Helensburgh, Four Oaks and Waterlooville.
“The strategic review will be completed by the autumn and we will give a further update with our half year results,” White said.
“At the end of the review every partner will be clear on the concrete plan and what the future means for their area and for the partnership.”