John Lewis staff get 15% bonus
More than 90,000 John Lewis and Waitrose staff will receive bonuses worth 15% of salary after the group reported a 9.6% rise in annual profits.
The John Lewis Partnership, which is owned by its 91,000 employees, said staff would receive the equivalent of nearly eight weeks' pay from a bonus pot of £202.5 million.
But the payout is lower than last year's windfall worth 17% of salary due to the increased cost of servicing the group's mammoth £1 billion pension fund deficit.
Each worker - from weekend check-out assistants to chairman Charlie Mayfield - receives the same percentage of salary as a bonus.
Details of the windfall came as annual results revealed pre-tax, pre-bonus profits of £376.4 million for the 52 weeks to January 25, which were boosted by a successful Christmas for the department store chain and Waitrose supermarket business.
Bottom-line profits were 4.1% lower at £329.1 million after the group had to pay £47.3 million in back pay to around 69,000 staff last summer after discovering it miscalculated holiday pay dating back to 2006, leaving some workers entitled to thousands of pounds in compensation.
Its results also lay bare the escalating cost of its workers' pensions, with John Lewis seeing a £181.3 million, or 22.1%, leap in the scheme's funding shortfall.
The group has agreed a 10-year plan to plug the deficit that included a one-off payment of £85 million in January.
John Lewis revealed proposals last month to cut back its final salary pension scheme, which is one of the most generous in Britain, with plans to switch to a hybrid defined benefit and defined contribution scheme.
But sales figures highlight "another good year" for the group, according to Mr Mayfield.
Revenues surpassed the £10 billion milestone for the first time - up 6.6% to £10.2 billion - and like-for-like sales increased by 6.4% across John Lewis department stores and by 5.1% at Waitrose.
The group emerged as one of the retail winners over a highly competitive Christmas season, with John Lewis's like-for-like sales up 6.9% and Waitrose reporting a 3.1% rise.
And it said the new year had started well, with comparable store sales 5.3% higher at John Lewis and 3.7% up at Waitrose in the first five weeks.
Mr Mayfield said 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.
The bonus payment to staff - dubbed "partners" by the group - works out to an average of £2,225 each.
The overall pot is lower than the £210.8 million shared out last year after the pensions hit, while it is also split between more staff as John Lewis increased its workforce by 7.4% after creating another 6,300 net new jobs.
John Lewis said it aims to make a decision on the planned changes to its pension scheme towards the end of the year.
The shift to a hybrid scheme will see staff share future pension risk, while it will mean a reduced accrual rate for future service and see employees wait five years to join, instead of the current three.
The group spent £533.1 million across its two chains last year, including ramped up spending on IT and distribution, as well as opening new stores.
It opened 13 new Waitrose branches in the year to January 25, including five new little Waitrose convenience shops, taking its total supermarket estate to 305.
The group has plans for another 38 Waitrose stores this year, including 23 convenience outlets.
After opening an "at home" store, it now has 40 John Lewis shops across the UK, including 30 department stores.