Department store group cuts bonus from 15% to 11% with staff receiving about six weeks’ pay after profits drop to £342m.Customers reflected in a John Lewis store.
John Lewis Partnership has cut the annual bonus payout to its 93,800 staff to 11% of salary, the lowest in 12 years, after reporting a 9% fall in profits.
The department store group’s partners, who co-own the business and
include everyone from the chairman, Sir Charlie Mayfield, to cashiers
and other shop floor staff, will share a reduced bonus pool of £156.2m
this year.
The bonus is the lowest since 2003 when staff received 10% of salary. Last year staff received a bonus worth 15% of salary,
sharing a total bonus pool of £202.5m. As usual, the annual payout was
announced in front of hundreds of staff at the flagship John Lewis store
in London’s Oxford Street and at stores around the UK. Staff cheered
the bonus figure, equivalent to nearly six weeks’ pay.
The retail group, which owns the upmarket grocer Waitrose, said
profits excluding tax, the partnership bonus and one-off items dropped
to £342.7m last year due to a poor performance at Waitrose, which has been hit by the fierce price war among supermarkets.
John Lewis
blamed a “highly competitive and deflationary market” which offset a 6%
rise in customer numbers. The grocer posted a 24% fall in operating
profits to £237m, partly due to higher investment in new branches. Like
for like sales were up 1.4%, ahead of the market, and market share grew
to 5.4%.
However, since then the latest market data from Kantar for the four weeks to 1 March showed Waitrose suffered a loss in market share for the first time since 2009.
For the first time in 15 years, thanks to new legislation that places
employee ownership on a similar footing to other forms of ownership, no
partner will pay tax on their bonus up to £3,600.
The bonus payout started in 1920 and was suspended during the second
world war and the early 1950s recession, and peaked at 24% of salary in
the 1980s.
Staff will share an extra windfall of £22m this year,
in holiday pay and pension contributions. The windfall was announced in
January, 18 months after 69,000 John Lewis workers received £40m in holiday backpay, after the retail group admitted it had been miscalculating pay for seven years.
Priscilla Aldridge, who has worked for Waitrose as an assistant
section manager for less than a year and so is receiving her bonus for
the first time, said the payment would pay for driving lessons. “It’s
wonderful to be part of a partnership. There’s a really special
atmosphere in store because we feel we co-own the business.”
Mo Miah, who works for Waitrose in Marylebone, central London, said:
“Eleven percent is not disappointing. Last year a lot had to be taken
into consideration like the pension and holiday payments and we’re
opening lots of new branches.” He said he would be spending his bonus on
car insurance.
