John Lewis scraps staff bonus

Dame Sharon White, chairwoman of John Lewis Partnership Image: John Lewis Partnership

John Lewis and Waitrose staff will not receive a bonus next April for the first time in more than 60 years.

Dame Sharon White, chairwoman of the John Lewis Partnership, said the decision was taken due to the firm’s profit outlook, which has been severely affected by the pandemic. In the first half of this year it made a loss of £55m, excluding one off-costs.

Dame Sharon said: “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.

“Outside of exceptional circumstances, we would now expect to begin paying a bonus again once our profits exceed £150m and our debt ratio falls below four times. Once our profits rise above £300m and a debt ratio below three times, we would expect to pay a bonus of at least 10%.”

She added that the organisation found itself in a similar position in 1948, when the bonus was halted following the Second World War. Employees began receiving a bonus again in 1954.

“We should be confident about our future. We have two of the best loved brands on the high street. Purpose is fundamental to everything we do and believe in – tackling inequality, improving sustainability and wellbeing – at a time when customers are more thoughtful than ever before about what they buy and who they buy with,” she added.

Eight John Lewis stores did not reopen following the lockdown earlier this year, which affected 1,300 jobs, and the company plans to close three Waitrose stores and sell another to Tesco.

It earlier this year announced plans for a retraining fund for employees affected by the job losses, which would contribute up to £3,000 towards a recognised qualification or course for up to two years for any employee with two years’ service or more.

Moira Clark, professor of strategic marketing at Henley Business School, commented: “The loss of bonus is bound to have an impact on staff morale at John Lewis. The staff were undoubtedly already feeling anxious about the state of the high street before Covid-19, and these recent months have continued to put immense pressure on retailers and employees.

“However, there is immense loyalty and goodwill towards John Lewis not only from the partners but also from their loyal customers base, and I am confident that with the right strategy they will pull through.”

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