John Lewis warns staff may have to forego bonus

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  • Cost of living crisis impacts as customers ‘spend less’
  • John Lewis sales rose 3% but Waitrose sales fell 5% in the first half.
  • The group is increasing entry level wages for its employees by 4% at a cost of £10m.

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John Lewis has warned employees that they may have to forgo their annual bonus if trade does not improve significantly in the coming months.

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The employee-owned retail giant, which also owns Waitrose, fell to a loss of £99m in the first half as the cost-of-living crisis hit consumer spending and its spending soared.

However, it has decided to help staff with the rising cost of living by announcing a £500 lump sum for full-time workers, with a prorated amount for part-time workers.

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John Lewis and Waitrose’s staff may have to forfeit their annual bonus if trade does not improve.

Chairman Sharon White said: “A successful Christmas is key for business, given the first half.

“We will need a significant performance boost beyond what we typically achieve in the second half of the year to generate enough revenue to share the affiliate bonus with partners.

“A lot will depend on the broader economic outlook and consumer sentiment.”

The partnership’s losses widened to £99m in the six months to the end of July, compared to £29m in the same period last year.

It said this was due to falling demand, its decision not to fully pass on higher costs to customers, and a move away from pandemic trends.

“We have seen customers shift their discretionary spending from high-margin, high-value household items to restaurants and holidays—from dining room furniture to out-of-home dining,” the company said in a statement.

He added that he decided to “give up” profits while helping his employees through the crisis.

In addition to the lump sum payment for the cost of living, the company is increasing entry-level wages for its employees by 4 per cent at a cost of £10m for the group for the second half.

The basket sizes at Waitrose are almost one-fifth smaller because the shopper spends less.

The basket sizes at Waitrose are almost one-fifth smaller because the shopper spends less.

Sales at John Lewis department stores rose 3% on a comparable basis to £2.1bn over the period, but fell 5% to £3.6bn at Waitrose stores.

Sales of John Lewis private label products rose 28% as shoppers opted for cheaper products amid tight budgets.

The company said energy-saving products were also in strong demand, with air fryers up 56% and smart thermostats up 8%.

Transactions at Waitrose were up 14%, but cart size was down by nearly one-fifth per shopper.

Looking ahead, the group warned about “highly uncertain end of the year, including the peak Christmas season.

Dame Sharon said: “No one could have predicted the magnitude of the cost-of-living crisis that materialized, with energy prices and inflation rising earlier than anyone expected.

“As a business, we have experienced unprecedented price inflation for groceries and general goods.

Credit: www.dailymail.co.uk /

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