Department store chain John Lewis Partnership has slashed its staff bonus for the first time since 1953, aftering reporting a £635m pre-tax loss for the half-year period ended July 2020.
As result, the Partnership board has confirmed that there will not be a bonus next year given its profit outlook.
The group said it would now expect to begin paying a bonus again once its profits exceed £150m and its debt ratio falls below four times. Once its profits rise above £300m and a debt ratio below three times, it would expect to pay a bonus of at least 10%.
Oversales increased by just 1% on the same period last year – up 1%, with shoppers spending more on less profitable lines such as laptops and loo rolls.
However, online sales growth was “strong” at 73% which helped to offset the impact of shop closures, with overall sales down (10)% on last year. Further to this, John Lewis said sales momentum is starting to build in reopened stores, with sales down around 30% on last year, ahead of expectations.
Sharon White, chair and partner, said: “With the whole country having had such a challenging year, we want to help families to celebrate their best Christmas (or other festivals this winter that may be special to them). John Lewis opened its Christmas shop early this year.
“Sales of Christmas trees and baubles are both markedly up on last year. Alongside our Essential range, which features items such as our whole turkey and shortcrust mince pies, Waitrose is launching 350 new own-brand foods for Christmas – from No.1 British Venison Wellington and Heston from Waitrose Chocolate Bucks Fizz Candles.
She added: “The outlook for the second half is clearly uncertain given the broader macroeconomy. Christmas trade is also particularly important to profits in John Lewis and I would ask Partners to do everything we can to serve customers brilliantly both in John Lewis and Waitrose.
“In April, we set out a worst case scenario for the full year of a sales fall of 5% in Waitrose and 35% in John Lewis. That remains our worst case view. We now believe the most likely outcome will be a small loss or a small profit for the year.”