John Lewis Partnership staff are set to discover this week whether they will receive their first annual bonus since 2022, as the employee-owned retail group prepares to unveil its full-year results on Thursday.
The business, which operates the John Lewis department store chain and Waitrose supermarket arm, will report its performance for the year to January and is expected to use the update to confirm whether partners will once again miss out on the traditional payout.
The annual bonus, once one of the defining symbols of the John Lewis model, has not been paid since January 2022 as the retailer has sought to stabilise its finances during a prolonged turnaround effort. The partnership first suspended the bonus in 2020 during the pandemic, marking the first time it had done so since 1953.
Although it briefly returned in 2022, staff have now gone without it in 4 of the past 5 years.
Whether the bonus returns this year remains unclear. The payment is decided by the partnership board, and while hopes have been building internally, expectations appear to have been tempered in recent weeks.
Last summer, John Lewis Partnership suggested in an internal update that staff could be in line for a payout if the group exceeded a £200m profit target.
However, analysts are understood to be forecasting profits closer to £140m, well below that threshold. According to reports, some senior figures inside the business have also warned staff that the retail environment remains subdued, raising fresh doubts over whether a bonus will be signed off.
That uncertainty will be particularly frustrating for employees, many of whom had called for the return of the bonus after it was withheld again last year despite a sharp improvement in profitability. Underlying profits rebounded from £42m to £126m in the year to January 2024, but the partnership still opted against a payout.
For generations of John Lewis staff, the annual bonus has carried significance beyond its monetary value. At its height in the 1980s, the retailer paid out bonuses worth as much as 24 per cent of salary, cementing its place as one of the clearest expressions of the partnership model.
Its disappearance in recent years has therefore become symbolic of the pressure facing the business as it attempts to restore growth while preserving what makes it distinct.
Former Tesco UK boss Jason Tarry, who took over as chair in 2024, has sought to steady the ship after a turbulent period under his predecessor Dame Sharon White, whose tenure became associated with store closures, job cuts and a wider reshaping of the business.
Tarry has instead placed renewed emphasis on John Lewis Partnership’s core retail operations, moving away from some of the diversification plans pursued in recent years.
That shift in focus has become increasingly clear. Last month, the partnership formally abandoned its plans to build around 10,000 rental homes, shelving the build-to-rent strategy launched in 2020.
The company said rising costs and a more cautious property market had made the scheme less viable, with the decision framed as part of a broader effort to concentrate investment on retail.
The group is now investing £800m into its stores and wider retail operations. Over the past year, it has refurbished 23 Waitrose branches and five John Lewis stores, while also making a renewed push in fashion through the rollout of Topshop across all 32 department stores.
John Lewis Partnership has also attempted to send a more positive signal to staff in other ways. Last month, it announced a 6.9 per cent pay rise for John Lewis and Waitrose partners as part of a £108m investment in its workforce.
That increase, which outpaces inflation, was widely seen as an attempt to boost morale at a time when the fate of the bonus remains uncertain.
Still, the financial backdrop remains challenging. In its half-year results in September, the partnership reported that losses before tax and exceptional items had widened from £30m to £88m.
Like much of the sector, it continues to face pressure from weaker consumer demand, higher employment costs and broader uncertainty across the UK retail market.
Thursday’s results will therefore be closely watched not only for what they say about profits and trading, but for what they reveal about the next phase of John Lewis Partnership’s recovery.
For staff, however, the central question is a simpler one: after years of restraint, will the bonus finally return?
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