John Lewis to pay first staff bonus for four years

John Lewis is awarding its staff a bonus for the first time in four years as the retailer continues its turnaround.

The partnership, which operates the eponymous department store chain and Waitrose supermarkets, said underlying profits had grown during its last financial year.

The 2% bonus, equivalent to an extra week's pay, will be the first its staff have received since 2022. It was scrapped during the Covid pandemic when the business underwent a major revamp which included shutting shops and cutting jobs.

Looking ahead, John Lewis said it remained "cautious" for the current year but was in a stronger position financially "to navigate the challenging macroeconomic environment".

Richard Hyman, retail industry analyst described the 2% staff bonus as "modest".

But he said: "I think it reflects progress being made by the new leadership team of the partnership, so it is very reassuring that they are going in the right direction."

In 2024, the company appointed Jason Tarry, the former boss of Tesco in the UK, as its chair, taking over from Dame Sharon White who led the employee-owned business between 2020 and 2024.

The latest results show the business reported a pre-tax loss of £21m, due to £120m worth of one-off costs which mainly related to write-downs in the value of old tech systems.

But underlying profits rose 6% to £134m. Sales across the business rose by 5% to £13.4bn.

Sales growth was higher at Waitrose compared to John Lewis. Supermarket sales grew by 7% to £8.5bn in the year to the end of January compared to a 3% increase to £4.9bn at its department stores.

Hyman told the BBC's Today programme the sales at John Lewis's department stores were in line with the wider retail market.

"They were below the market growth for some years under the previous leadership team so turning business round, especially of this size, takes time, it's baby steps and they are taking those baby steps I think," he said.

Under Tarry's leadership, John Lewis has refocused the firm on retailing. It recently abandoned its housebuilding business and scrapped plans to build 1,000 homes across three sites, citing higher borrowing and construction costs.

Six years ago, John Lewis had said it wanted to build 10,000 homes for rental, which it said at the time would provide long-term income and new jobs.