John Lewis axes bonus as losses surge to £234m
It comes as the impact of inflation was ‘felt across the business’, adding an extra £179m to its costs over the year
John Lewis has seen losses plummet to £234m in its full-year results, down from a loss of £27m the prior year, with the group axing its staff bonus for a second time and warning of future job losses.
It comes as the impact of inflation was “felt across the business”, adding an extra £179m to its costs over the year. One of the biggest exceptional costs in the period was a write down in the value of Waitrose stores across its estate.
Chairman Sharon White noted it had been a “very tough year” for the group, but assured its balance sheet remains strong, with £1bn of cash and access to a £420m credit facility, “like an overdraft, if we need it”.
Nonetheless she said that shoppers had “felt the pain of inflation” over the period, with sales dipping by 2% to £12.25bn, as strong sales at John Lewis were offset by a decline of 3% at Waitrose.
While customers grew by 800,000 to 20 million, they bought less over the year, according to the group. It added that the online boost seen during the pandemic was partly reversed, and that shoppers had shifted some of their grocery spend to discount retailers.
In light of these results, the group has axed its staff bonus for the second time in three years, as White said she was “sorry that the loss means we won’t be able to share a bonus this year or do as much as we would like on pay”.
She pledged the group would “continue to help with the cost of living in other ways”, such as the financial assistance fund, which will stay at £800,000, and support for travel, childcare and living costs.
The group also warned of future job losses, with White adding: “As we need to become more efficient and productive, that will have an impact on our number of partners. That’s a massive regret to me personally. It would be difficult enough in any business.”
Looking ahead, she said the external environment “is no less uncertain”, and that despite headline inflation starting to fall, the group is still seeing costs rise.
In light of this, the group said it has adapted the Partnership Plan to improve the profitability of the business, tripling its target for efficiency savings from £300m to around £900m by January 2026.
