JOHN Lewis Partnership has warned staff they may not receive their customary bonus as the upmarket retailer said full-year profits would be “substantially lower” this year.
It would be the first time that the retailer has not made the pay-out to its employee owners since 1953 – when rationing was still in force and the Queen was crowned.
Chairman Sir Charlie Mayfield issued the warning as the John Lewis Partnership reported a 1.4 per cent increase in gross sales to £2.2 billion for the seven weeks to January 5. Gross sales in John Lewis department stores grew by 2.5% to nearly £1.2bn and like-for-like sales edged up 1%, with Black Friday contributing to the biggest sales week in the chain’s history.
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But growth was less pronounced in the group’s Waitrose grocery division, which booked gross sales of £1.05bn – up 0.2% on last year – and a 0.3 per cent rise in like or like sales.
Sir Charlie said it had been a positive Christmas for the company as he highlighted the impact of an “oversupply of physical space and relatively weak consumer demand” on the retail sector. But he warned that slower sales growth, margin pressure in John Lewis department stores and higher costs would lower profits substantially for the year.
Sir Charlie said: “The actions taken in recent years to prepare for the current pressures in retail mean that the Partnership has the financial strength and flexibility to pay a modest bonus this year, without impacting our ambitious investment programme.
“However, the board will need to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time.”
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