John Lewis may need a Christmas miracle to pay staff bonus
The retail giant’s half year report revealed it made a loss before tax of £99m, up from the £29m reported in 2021/22.
John Lewis revealed that it gained more customers, but they were spending less because of inflation. Sales were £2.1bn, up 3% like-for-like on last year.
However, it was quick to state that “it is not unusual” for it to make a loss in the first half of the year.
Sharon White, partner and chairman of John Lewis, explained that it had made a loss in three of the last four half years and said trading is “heavily skewed to Christmas with most of our profits coming in the last quarter of the year”.
However, she warned: “A successful Christmas is key for the business given the first half. We will need a substantial strengthening of performance, beyond what we usually achieve in the second half, to generate sufficient profit to share a partnership bonus with partners. Much will depend on the wider economic outlook and consumer sentiment.”
The staff bonus is always decided in March at its year end results so if a bonus is given the green light, it would be received in April pay packets. This April, employees received 3%. John Lewis employs around 76,000 staff, split between 40% full time and 60% part-time workers.
In September 2020, John Lewis confirmed it would scrap the following year’s bonus for staff – the first time since 1953 – after posting pre-tax losses of £635m.
John Lewis cost of living help for partners
John Lewis confirmed it has doubled (to £800,000) the financial assistance for staff facing hardship, as it will spend £45m to help employees, “in addition to the April 2022 pay increase and bonus”.
This will include food at work for 14 weeks over winter (October to January) and it will make a one-off cost of living payment on 23 December equal to £500 per full-time employee.
Further, it said it is increasing the entry level pay by 4%, so recruitment rates will rise to at least £10.30 per hour, and in London, £11.50 per hour from 1 October, benefiting over 70% of staff. This move will add £10m to its costs in the second half of the year.