OHN Lewis lost £99 million in the first half of the year and has pledged to pay £500 to full-time employees to help mitigate the cost of living crisis.
It also promised free meals at work for 14 weeks over the winter, a 4% increase in wages for new partners at a cost of £10 million, and increased grants to employees hardest hit by inflation.
But the annual bonus to the partners based on profit is clearly at risk.
President Sharon White told Standard: “The partnership model means we can take a long-term perspective. We’ll hit profits to help our partners. We’ll make sure they can and do eat well.”
She said the outlook is “highly uncertain” and she could not say when the group could return to profits. It earned £69 million for the same period of July last year.
“I’m a realistic optimist,” she said. “We will control the controls.”
He praised the adaptability of employees who have “strongly and swiftly responded” to rapidly changing situations, including “three at a time” incidents over the years, by which they mean the financial crisis, COVID and now. Rising inflation.
Sales at the John Lewis department store remained good, rising 3% to £2.1 billion, but falling 5% to £3.6 billion at Waitrose.
Waitrose is seen as a high-end grocer, likely to struggle to compete with Aldi and Lidl, though White says its “Essentials” range is doing well.
White is trying to restart the business while maintaining its core values. She wants to expand into financial services and build rental homes, which she says is “taking shape”.
The John Lewis Partnership has £1.5 billion in cash and credit to help with future aftershocks.
It notes that it makes most of its money on Christmas. And said workers returning to offices had helped drive sales at City Center stores.
Earlier this year the JLP reinstated its bonus payments to employees, handing them 3% of wages, of about 1.5 weeks.
Retail analyst Nick Babb told TODAY: “It will require a Christmas miracle for JLP to pay the bonus this year.”
The business acknowledged in its statement today: “To generate sufficient profit to share partnership bonuses with partners, we will need to strengthen performance beyond what we typically achieve in the second half”.
In his letter to employees, White said: “No one could have predicted the scale of the cost of living crisis, which with energy prices and inflation far exceeding one’s expectations. As a business “We have faced unprecedented cost inflation in the grocery and general business. I know that after two difficult years of the pandemic and the necessary – but difficult – restructuring, partners across the business are really feeling it. In this time of uncertainty I thank you all very much for your continued commitment to me. I know it hasn’t been easy.”
Credit: www.standard.co.uk /