Employees of the John Lewis Partnership will receive a 2% bonus for the year to January 31, the first such payout in four years, the company announced. The total bonus payment amounts to approximately £35 million, according to multiple reports. However, the partnership posted a pre-tax loss of £21 million, down from a £97 million profit a year earlier, due to exceptional charges including write-downs related to legacy tech systems. Despite the loss, profits before tax, bonus and exceptional items rose 6% to £134 million, the company said.
Sales across the business increased by 5% to £13.4 billion for the year, driven by growth in both its John Lewis department stores and Waitrose supermarkets. Profits were affected by approximately £53 million of additional costs linked to tax changes introduced in April 2024, including higher national insurance contributions costing around £40 million and the Extended Producer Responsibility packaging levy costing £13 million, according to the company.
Chairman Jason Tarry struck a cautious note on the outlook for the current financial year, citing a challenging macroeconomic environment. According to Tarry, consumer sentiment is 'definitely subdued and definitely fragile'.
In supermarkets, we have seen 7% growth on the back of volume growth despite a wider drop in volumes across the market, so that is positive. In discretionary areas, it is definitely tougher. We remain cautious and that was before the breakout of war in the Gulf.
In a move to boost productivity, John Lewis has told head office staff they must work 'more in person than not', according to the company. The retailer said many of its competitors have already implemented a return-to-the-office policy, and the changes would help accelerate its turnaround and achieve better outcomes. John Lewis is exploring options to create more space in its existing offices for staff to come in more regularly. The company told staff the new directive does not constitute a change in policy and it remains committed to hybrid working. John Lewis previously championed a blended approach and halved the size of its central London offices in 2023. Staff in the commercial team were told they should work no more than two days a week from home, according to multiple reports.
The partnership cut 3,300 jobs in the year to January 2026, reducing total jobs from 69,000 to 65,700, according to the company. Of those, 1,500 roles were cut at John Lewis and 1,800 at Waitrose. The partnership currently employs approximately 65,000 partners, though some reports cite a higher figure of more than 70,000 employees, possibly reflecting different reporting periods or definitions. Meanwhile, John Lewis announced a 6.9% pay increase for shop workers, effective from 1 April, with the minimum hourly rate rising to £13.25 nationwide and £14.80 within the M25, according to media reports.
Chairman Jason Tarry's basic pay rate increased by 21% to £1.2 million, the company disclosed. Separately, John Lewis axed its short-lived rental housing venture, blaming economic conditions, and took a £22 million write-off on the failed build-to-rent venture, according to multiple reports.
Things will not get easier going forward.
The bonus was first scrapped in 2020 due to COVID-19 lockdowns, the first suspension since 1953. John Lewis returned the bonus in 2022 but has not paid it out since then, making this year's reinstatement notable.
On supply chain stability, Tarry said the business experienced no disruption to its supply chains from the recent conflict in Iran and anticipates no immediate effect on energy expenses due to hedging.
In a separate incident, Waitrose sacked a worker for tackling a person who attempted to steal Easter eggs from a store in Clapham, according to multiple reports. Shadow home secretary Chris Philp called on Waitrose to reinstate the fired employee, and Iceland boss Richard Walker offered him a job, the reports said.