John Lewis restores bonus as department store sales surge

John Lewis has restored its staff bonus after sales at its department stores bounced back in 2021.

Sales at its department stores hit a record £4.9bn while revenues at its Waitrose supermarkets rose by 1% to £7.54bn.

The company also said that losses narrowed sharply on the previous year.

Losses for the year to 29 January shrank to £26m from £517m in the comparable 12 months.

Dame Sharon White, boss of John Lewis Partnership said the group had made a "good start" to a tough five-year restructuring plan but added it was "only one year through".

Even before the pandemic the retailer had been hit hard by the shift to online shopping, and last year announced store closures and almost 2,500 job cuts.

Dame Sharon said: "Looking ahead, we see continued uncertainty from global events, affecting the economic environment, our customers, partners and society. As inflation and energy prices rise, our customers face higher living costs.

"While this creates uncertainties as we look ahead, we remain focused on investing significantly in our Partnership Plan to transform and grow our business."

The employee-owned business said it would pay a bonus of 3% to its employees, equivalent to one-and-a-half weeks' pay, and increase wages by 2%. This is on top of a pledge to pay the real living wage.

The last time John Lewis had not paid a bonus was in the aftermath of World War Two.

It suspended payouts last year after posting a huge £635m pre-tax loss for the six months to 25 July, caused primarily by lockdown store closures.

Since then the group has been trying to bolster it business by investing more in John Lewis shops and online shopping, and cutting costs elsewhere.

In July, it revealed plans to cut 1,000 jobs, having already said it would axe around 1,465.

The group, which also owns the Waitrose supermarket chain, recently said it would ditch its "Never Knowingly Undersold" promise to customers, which began in 1925.

The pledge means the retailer matches prices on branded products with national retailers, but not online-only sales. However, John Lewis said it was becoming less relevant as shopping moved increasingly online.

The group has also said it will remove any products made in Russia from Waitrose and John Lewis in response to the conflict in Ukraine.