John Lewis warns staff bonus could be axed this year in current economic outlook

John Lewis warns staff bonus could be axed this year in current economic outlook

16 Sep    Finance News

John Lewis has again warned its staff there may not be a bonus this year, citing a “uniquely uncertain” economic outlook.

In her letter to more than 70,000 partners, who own the business, chair Dame Sharon White said that a successful Christmas was more important than ever this year.

“We will need a substantial strengthening of performance, beyond what we usually achieve in the second half, to generate sufficient profit to share a partnership bonus with partners,” she said.

However, the group also said it would make a one-off cost of living payment of £500 immediately, and had already said it would provide free meals for staff for 14 weeks over the busiest period of its year.

The group, which comprises the John Lewis department stores and the Waitrose supermarket chain, made a pre-tax loss of £99mn in the first six months compared with a loss of £29mn last year. First-half losses are fairly common at the group because of its seasonality.

Same-store sales at John Lewis were up 3 per cent, helped by the success of its entry-level Anyday ranges.

But sales at Waitrose fell by 5 per cent, as average basket sizes were nearly a fifth smaller.

John Lewis did not provide a full-year profit forecast but said it would step up its efficiency efforts to help mitigate a decision to absorb around £500mn of cost increases in the current financial year, rather than pass them on to customers.

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