Strong performance at Waitrose has helped the John Lewis Partnership return to a position where it can pay an annual bonus to its employees. The group announced a 2% bonus for its 69,000 partners after underlying profits grew by 6% to £134 million. This marks a significant milestone for the firm, which had suspended the payout for four of the last five years.
Waitrose saw its operating profit climb by nearly 13% to £256 million, with sales reaching £8.5 billion. The department store side of the business also improved its underlying profit by 29%, even as it faced a “subdued” market. These internal successes allowed the board to approve a £35 million bonus pool despite a small statutory loss before tax.
The path to this bonus has been paved with cost-cutting and store closures. Thousands of jobs have been eliminated and numerous locations shuttered as part of a wide-ranging turnaround plan. This strategy has been controversial, but leadership argues it was necessary to return the company to a sustainable financial footing following the losses of the pandemic years.
Looking at the broader picture, the partnership faced significant headwinds from increased taxes and the cost of upgrading old technology. Despite these pressures, the firm is investing £800 million in its stores, including recent refurbishments and the addition of the Topshop brand. This investment is designed to sharpen the retailer’s appeal in a highly competitive fashion and grocery market.
Chairman Jason Tarry has indicated that the group will continue to seek out operational efficiencies while focusing on its core retail and financial services divisions. By ending its foray into the rental housing market, the company is concentrating its resources on the brands consumers know best. The outlook remains cautious, but the return of the bonus signals a more stable era.