John Lewis returns to profit but staff miss out on bonus for second year running

John Lewis on Thursday reported a surprise return to profits after a “difficult” year, but the retail giant will not pay any bonuses to its staff for the second year in a row.

The company posted a pre-tax profit of £56m, compared with a loss of £234m last year, thanks to an aggressive £900m cost-cutting program following three consecutive years of losses.

Chairman Sharon White said John Lewis had made “significant progress”, giving the group the financial headroom to invest, and she expected “profits to continue growing” in 2024.

Despite a “challenging year for the sector”, John Lewis said a million more customers shopped in its stores last year, spending £12.4 billion, up 1 per cent on 2023.

White added: “This shows that our plan is working, although we know there is much more to do.” “Our improved performance has been underpinned by our customers’ love for both brands, with more people than ever choosing to shop with us, and our partners’ commitment to providing excellent customer service.”

Waitrose sales rose 5 per cent to £7.7bn, but market share has continued to decline due to the cost of living crisis.

John Lewis stores have also struggled and while sales in the fashion sector have increased, overall revenue has been hit by home and technology. He reported revenue of £4.8bn, down 4 per cent on the previous year.

The retail association announced it would not pay bonuses to its staff for the second year in a row.

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The partnership said: ‘As employee-owners, we have a shared responsibility to ensure the partnership is sustainable over the long term. We have consistently said that at this point in our transformation, the best way to achieve this is to invest in our retail businesses and partner base pay.

‘Therefore, after careful consideration, we do not believe it is right to award a partnership bonus this year. “We are increasing total pay by £116m in 2024, a record investment.”

In a video message earlier this year, White told staff to prepare for “pretty big changes and pretty bold changes.”

It is considering reducing its workforce by a tenth over the next five years and reducing redundancy payments. But it is also increasing pay for factory workers by 10 per cent to a minimum of £11.65 an hour across the UK and £12.89 in London.