Financial News

  • 7 March 2014, 15:47

John Lewis Cuts Staff Bonus As Profits Rise

The John Lewis Partnership has confirmed a reduced bonus for its workforce despite annual profits rising almost 10%.

It means all 91,000 John Lewis department store and Waitrose staff - known as partners at the employee-owned company - will receive bonuses worth 15% of salary.

That equates to nearly eight weeks' pay - an average of £2,225 each - from a bonus pot £202.5m.

John Lewis blamed the cost of servicing the group's £1bn pension fund deficit for the decision to cut the award from last year's salary percentage of 17%.

It made an additional £85m contribution in January and said it had invested a total £584m in benefits for its partners during its financial year.

They included bonuses, partner discount, catering subsidies, long service leave, leisure spending and the running of its five holiday centres.

Each worker - from weekend check-out assistants to chairman Charlie Mayfield - receives the same percentage of annual salary as a bonus.

The Partnership announced the windfall for partners at the same time as its annual results which confirmed pre-tax profits - before bonus payouts - of £376.4m for the 52 weeks to January 25.

John Lewis largely credited a successful Christmas and said like-for-like sales increased by 6.4% across John Lewis department stores and by 5.1% at Waitrose on an annual basis.

It confirmed the Partnership created more than 6,000 new jobs over the past financial year and said it was planning to open another 38 Waitrose stores this year, including 23 convenience outlets.

Partnership chairman Charlie Mayfield said: "This has been another good year for the Partnership.

"Both Waitrose and John Lewis increased market share for the fifth consecutive year, profit before exceptionals has grown by almost 10% and, for the first time, we have achieved sales of over £10bn."

He added that the group had needed to adapt quickly to "fundamental changes" in the industry, with shoppers demanding better value, convenience and personalisation.

"The level of change has at times been challenging, but partners have understood and embraced the need for their business to continue to develop," he said.

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