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John Lewis and Waitrose staff bonus cut to 10%

Published 10/03/2016

The payout was cut for the third year in a row
The payout was cut for the third year in a row

More than 90,000 John Lewis and Waitrose staff will see their staff bonuses cut to 10% of their annual salary.

The payout was cut for the third year in a row after staff were handed 11% last year, 15% the year before and 17% in 2013.

John Lewis Partnership, which is owned by the employees of the two retail chains, reported pre-tax profits before exceptional items of £305.5 million for the 52 weeks to the end of January 30 2016, down from £342.7 million last year.

The group said the partnership bonus of £145 million was equivalent to five weeks' pay and applied to 91,500 staff.

The group's results came under pressure as the supermarket price war continued to impact Waitrose, which saw operating profits fall to £232.6 million for the full year, down from £237.4 million over the period before.

Like-for-like sales excluding petrol also fell back, down 1.3%.

Partnership chairman Sir Charlie Mayfield said the group had delivered a "healthy trading performance" and bolstered market share despite the challenging trading conditions.

He added: "Market conditions were challenging through the year with deflation in grocery of -2.6% and subdued demand in non-food.

"Quality, value and product innovation were therefore all the more important alongside greater convenience and service. Our partners performed well on all those fronts and did so while controlling costs tightly and increasing margin."

It comes after Waitrose faced tough trading over the crucial Christmas period when it posted a 1.4% fall in like-for-like sales excluding fuel over the six weeks to January 2.

Retailers have come up against difficult trading in the supermarket sector as grocers continue to lock horns in the face of the increasing might of German discounters Aldi and Lidl.

The group - which has 46 John Lewis shops across the UK and 345 Waitrose shops - said its pre-tax profits before exceptional items had come in line with expectations, but were hit by higher pensions charges caused by market volatility.

However, it revealed a bright start to the year, with gross sales after the first five weeks up 4.2% compared to same period last year.

Sir Charlie said: "Conditions in the market will remain difficult, especially in grocery.

"However, given our continued investment in both our operations and the customer offer, I expect sales in both Waitrose and John Lewis to continue to perform comparatively well against the market."

Department store chain John Lewis saw its operating profit before exceptional items fall slightly to £250.2 million, a 0.2% fall on a 52-week basis, as like-for-like sales grew 3.1%.

The sales performance was bolstered by a 17% surge in online trading, with in-store sales down 1%.

The group said John Lewis saw growth in sales and market share across fashion, home and electricals and home technology. Fashion was up 6.2%, with menswear sales growing 8.8% and womenswear climbing 6.5%.

Meanwhile, the customer appetite for its click-and-collect service continues to strengthen, with collection of John Lewis orders from Waitrose up 19%.

The department store saw 3.6% growth in like-for-like sales in the first five weeks of the current year, while Waitrose saw like-for-like sales excluding petrol rise 0.4%.

During the year, the group also launched the Waitrose Kitchen website, with 3,000 lines of cookware, bakeware and gadgets.

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From Belfast Telegraph