Once they got 20%, now John Lewis staff face losing bonus

Marco Green
January 12, 2019

The John Lewis Partnership dropped a bombshell today, warning that its annual staff bonus could be quashed for the first time since 1953, amid another hard fought Christmas.

Its 83,000 employees are usually awarded the payout in March, but they may be disappointed this year following slower sales growth and an expectation that profits will be "substantially lower".

"The board will need to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time".

The group said in a trading statement today (10 January) that gross sales at its John Lewis & Partners department stores were GBP1.16bn (US$bn) in the seven weeks to 5 January, up 2.5% versus past year and up 1% on a like-for-like basis - outperforming the market by 2%.

Catherine Shuttleworth, chief executive at retail marketing agency Savvy, said: "John Lewis - despite all the discounting - has still returned a positive result this morning with department store sales up and food sales also up on a like-for-like basis".

Sir Charlie told the BBC that it will make a judgment about "what's coming and the uncertainty in the market" before deciding whether to pay the bonus.

"We are in a very unusual economic and political circumstances". Gross margins at John Lewis & Partners remained under pressure in what was an intensely competitive pricing environment. It's affordable but the board needs to decide if it's prudent'.

Waitrose saw a 21 per cent boost in sales of English and Welsh wine, while it said new products in its vegan range had also proved popular with shoppers.

Like-for-like sales grew by 1% in the period overall, with particularly positive performances in fashion up 6.8%, with stand-outs in beauty up 11.2% and own-brand womenswear up 14.7%.

John Lewis said like-for-like sales at its 51 department stores had grown by just 1 per cent in the crucial Christmas trading period over the seven weeks to 5 January, while Waitrose reported like-for-like growth of just 0.3 per cent.

Total sales across the Partnership were up 1.4 per cent over Christmas to £2.2 billion.

Commenting on the Christmas trading update, Sir Charlie Mayfield, Chairman of the John Lewis Partnership, said in a statement: "Two main factors are affecting the retail sector - oversupply of physical space and relatively weak consumer demand".

Other reports by Click Lancashire

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