The employee-owned company that runs retailers John Lewis and Waitrose has cut staff bonuses for the second year in a row after posting a 9% drop in profits.
John Lewis Partnership (JLP) will cough up a windfall of £156million, giving each of its 93,800 staff a bonus equating to 11% of their salaries, or six weeks’ pay.
Staff took home a 15% bonus last year and 17% in 2013.
The partnership saw its pre-tax profits before exceptional items fall 9% to £342.7million for the 53 weeks to January 31.
Increased profits at John Lewis department stores have been offset by a “decline” at Waitrose, which has been hit by the on-going supermarket price war with bargain outlets like Aldi and Lidl.
Operating profits at John Lewis went up 10.8% to £250million, while Waitrose’s nosedived 23.4% to £237million.
The partnership’s chairman, Sir Charlie Mayfield described the outlook for John Lewis is “robust,” but conceded that the returns for the grocery sector would be “materially low for a period of time.”
But far from giving up the ghost, Sir Charlie said: “Waitrose’s value perception has improved significantly over the last few years and we will continue to defend that hard won position during this period of change in the grocery sector.”
He said sales at the high-end chain had gone up 6.5% to £6.5billion on a 6% rise in customer numbers.
Robert Garnish — head of John Lewis’ Aberdeen branch, which employs 400 people at the Bon Accord Centre — said trade has been more difficult than in recent years, though some areas are performing well.
“The buoyancy of the local housing market is continuing to provide good opportunities in home furnishings, which is a core area of our business.
“Plus, we have seen in fashion some strong growth in children’s wear and nursery, and I think, in part, we are seeing footfall driven by our new customer collection point, which we opened just before Christmas.”
Mr Garnish, who has worked at John Lewis Aberdeen for 15 years, said this morning’s bonus announcement was met with as much joy among staff members as at any other time, despite the reduction.
“The annual bonus is a very tangible benefit of being a co-owner for the 400 staff who work in John Lewis Aberdeen. It sets us apart from other businesses,” he said. “It’s the best day of the year for staff.”
He added that the Aberdeen branch, which opened 25 years ago, will next week unveil its new luxury handbag shop.
It will be the only outlet selling the Coach brand in the city.