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(qlmbusinessnews.com via bbc.co.uk – – Thur, 8 Mar 2018) London, Uk – –
Bonuses for 84,000 staff at John Lewis and Waitrose have been cut for the fifth year in a row.
Employees will get a 5% bonus, down from 6% last year and the lowest since 1954, when it was 4%.
Annual group profit, before the partnership bonus, tax and exceptional items, fell 21.9% to £289.2m.
John Lewis Partnership chairman Sir Charlie Mayfield said 2017 had been a “challenging year”, as expected, with “subdued” consumer demand.
He said weakness in sterling had led to higher costs, putting pressure on the business's profit margin.
“This was why we chose to reduce the proportion of profits paid as partnership bonus last year so as to absorb these impacts while continuing to invest in the future and in strengthening our balance sheet,” Sir Charlie said.
He said the firm remained committed to increasing pay rates for non-management staff, and that the average hourly rate of pay for a non-management workers was £8.91.
‘Volatile' year ahead
Like-for-like sales – which strip out the impact of store openings – at the John Lewis department stores were up 0.4%. At Waitrose, sales returned to growth, with like-for-like sales rising 0.9%.
Gross sales for the full-year period were up 2% at £11.6bn.
The partnership said it had been hit by exceptional costs of £282.5m, including £111.3m on restructuring branch, distribution and retail operations, and another £72.8m on redundancy payments.
There was a a 77% fall in pre-tax profits to £103.9m.
“We expect trading to be volatile in 2018-19, with continuing economic uncertainty and no let up in competitive intensity. We therefore anticipate further pressure on profits,” John Lewis said.
How does the John Lewis Partnership work?
- John Lewis has been a partnership since it started 150 years ago
- Waitrose joined in 1937
- Consists of an elected council, a board and a chairman
- First bonus paid in 1919
- First cash bonus in 1970
- No bonus paid in First World War, Second World War and early 1950s
- Company says its business structure allows it to have a longer term outlook as it doesn't have to answer to City shareholders
John Lewis said its stores had increased market share in fashion, home, plus electricals and home technology.
