John Lewis to launch Junior ISA but staff bonus axed this year
John Lewis Partnership’s annual results revealed it made a £234m loss, as it confirmed it would axe its staff bonus. Elsewhere, the retail giant is looking to launch a Junior ISA offering.
In its annual results to 28 January 2023, John Lewis confirmed its loss before tax but after exceptional items came to £234m, compared to £27m in 2021/22.
Sharon White, partner and chairman, said inflation had sent its costs soaring – adding an extra £180m on the previous year.
And for shoppers, it also saw sales dip 2% to £12.25bn, with “strong sales” at John Lewis hindered by a 3% decline at Waitrose.
Despite nearly 20 million customers – 800,000 more than last year – White noted they bought less, while others headed to discounters in a bid to lower their costs.
Product supply issues were also cited, as well as a major fire at one of its warehouses which hit availability in Waitrose last summer.
While its balance sheet remains strong with £1bn of cash and access to £420m credit, White confirmed it would not pay the staff bonus this year.
She said: “I am 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. We’ll continue to help with the cost of living in other ways – the financial assistance fund will stay at £800,000 (a doubling) and there is support for travel, childcare and living costs.”
Last April, the 76,000 staff received a 3% bonus, but in September 2022 it reported a £99m loss before tax which hinted that it would need a ‘Christmas miracle’ for sales and profit in order to pay the subsequent bonus.
At the time, it gave staff a £500 (pro rata) cost-of-living payment and offered free food over the winter to help.
In September 2020, John Lewis confirmed it would scrap the following year’s bonus for staff. This was the first time since 1953 it had sone so after posting pre-tax losses of £635m.
John Lewis ISA
The results revealed that it will “shortly launch the trial of a new proposition that helps parents invest for the long-term future of their children with a John Lewis Junior ISA”.
John Lewis told YourMoney.com that it hopes to share more details on this, hopefully in H1.
But back in 2021, it confirmed a partnership with digital wealth manager Nutmeg to offer investment products as part of its two-pronged plan to get more newbies into investing, and for 40% of its profits to come from outside retail by 2030.
From what we know so far, John Lewis was set to offer a stocks and shares ISA, a junior ISA and a general investment account, with customers able to start with a minimum £100. It was also expected to cater for those investing in environmental, social and governance (ESG) standards.
We’ll update this article once we hear back with more detail on this.
John Lewis Partnership Credit Card
This has been a controversial topic for many customers who emailed YourMoney.com venting their anger over the move to change provider from HSBC to NewDay where they were asked to reapply and subsequently many failed the credit checks.
John Lewis wouldn’t share total customer numbers with us, but said 96% of customers who reapplied had been accepted. Meanwhile, 84% had been offered the same or a higher credit limit.
As part of today’s annual results, it confirmed 600,000 customers joined its new Partnership Credit Card, admitting it was “not a smooth process for everyone, but customers are – on average – now spending more than before”.
Further, income from John Lewis Financial Services was up 22% on last year.
It added: “Since the completion of the Partnership Card transfer, which wasn’t easy for all customers given the scale of the change, we have seen average weekly spend of these customers increase by over 20% towards the end of last year”.