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John Lewis restores annual staff bonus as losses narrow

John Lewis A man wearing a face mask walks past a temporarily closed John Lewis department store on Oxford Street in London, Britain, March 24, 2021. REUTERS/John Sibley
John Lewis said that in addition to its voluntary living wage commitment, staff would get a 2% pay rise. Photo:John Sibley/Reuters (John Sibley / reuters)

Staff at the John Lewis Partnership (JLH.L) will share a £46m ($60.5m) bonus pot after the retail giant narrowed losses to £26m last year.

The group, which also owns upmarket supermarket chain Waitrose, said it will pay a bonus of 3% to its employees, or one-and-a-half weeks’ pay.

It also announced it would pay all workers at least the independently verified living wage of £9.90 across the UK, a 2% pay rise.

The employee-owned company was forced to axe this bonus last year as its business took a COVID-induced hit. It was the first time since 1953 that the company did not pay a bonus.

Read more: UK retail sales up 6.7% in February

“With our partners, like the whole country, facing a cost-of-living squeeze, we believe that this is the right time to pay the voluntary real living wage, nationwide,” chairperson Sharon White, said.

The group reported a 38% rise in underlying pre-tax profits to £181m in the year to 29 January, thanks to a record £4.9bn sales haul at the department stores – up 8% on a like-for-like basis.

Shares in the retail giant were down 0.3% in early trading. chart: Yahoo Finance UK
Shares in the retail giant were down 0.3% in early trading. chart: Yahoo Finance UK

But it remained in the red on a bottom-line basis, though losses narrowed sharply to £26m from £517m the previous year, when it posted its first ever annual loss after the pandemic battered John Lewis outlets.

Results were also buoyed by the John Lewis Partnership slashing costs by £170m, closing a raft of stores and cutting jobs.

Waitrose earnings dropped by 11% to £1bn as it faced surging costs within supply chains due to staff absences in the pandemic and higher online trade.

Read more: UK shop prices rise at highest rate since 2011

In July, the employee-owned business revealed plans to cut 1,000 jobs, having already said it would axe around 1,465 roles as part of last year’s store closures.

Last month it announced its "Never Knowingly Undersold" pledge to customers was being ditched as part of a new focus on its Anyday value ranges.

It has also said it will remove any products made in Russia from Waitrose and John Lewis in response to the conflict, including Russian vodka.

Watch: The risks of buying now and paying later