John Lewis scraps bonus for first time since 1953

Shopper walking past John Lewis storefront Image copyright Getty Images

John Lewis has confirmed that workers is not going to obtain a bonus for the primary time since 1953 after it was hit by lockdown retailer closures.

The retailer – which additionally owns Waitrose – mentioned it posted a £55m loss for the six months to 25 July after greater prices offset a 1% rise in gross sales.

Its chairwoman advised workers on Thursday the announcement “will come as a blow”.

Even earlier than Covid-19 hit, the chain had warned it won’t pay the standard workers bonus as competitors ate into earnings.

The group’s first-half loss rose to £635m as soon as distinctive objects have been taken under consideration, together with a £470m write-down within the worth of its shops.

The final time that the chain, which operates as a partnership, determined to not pay a bonus to its workers was within the aftermath of World War Two.

Chairwoman Dame Sharon White mentioned: “We came through then to be even stronger and we will do so again.”

She added: “I know this will come as a blow to partners who have worked so hard this year. The decision in no way detracts from the commitment and dedication that you have shown.”

The retailer mentioned retailer closures throughout lockdown and clients shopping for much less worthwhile objects, corresponding to bathroom paper or laptops, had hit commerce.

It estimated that in its first half, John Lewis retailers took a success of £200m in gross sales, whereas the broader group noticed further coronavirus-related prices complete about £50m.

But in an announcement, it mentioned that Waitrose had seen “a return to the weekly shop”, with like-for-like gross sales in Waitrose, which strip out the impact of recent shops opening, up 10% year-on-year.

Changing procuring habits

Dame Sharon mentioned the pandemic had introduced ahead modifications in client procuring habits “which might have taken five years into five months”.

In John Lewis shops, on-line gross sales elevated by 73% within the six months to 25 July, “helping to offset the impact of shop closures”. They now account for greater than 60% of gross sales general for the division retailer chain, up from 40% earlier than the pandemic hit.

The group added {that a} shift in direction of elevated home working had affected individuals’s purchases, with elevated gross sales of tablets and TVs, whereas gross sales of trousers had declined.

The chain additionally mentioned that Waitrose was now delivering about 170,000 weekly meals orders, up from 60,000 pre-lockdown.

Image copyright Getty Images
Image caption Waitrose has seen a “return to the weekly shop”, the John Lewis group mentioned

Having struggled to manage competitors from on-line rivals and slowing client spending, the group has, nonetheless, not too long ago introduced plans to close shops.

In September, the group introduced it will shut 4 of its Waitrose supermarkets, with the lack of 124 jobs.

In July, it additionally mentioned it will shut eight John Lewis shops, in a move which put 1,300 jobs in danger.

It additionally not too long ago scrapped its “never knowingly undersold” worth pledge, which had been in place since 1925.

The dedication by no means utilized to gross sales from internet-only retailers, which have decrease prices and sometimes undercut the High Street on worth.