John Lewis maintains decision to cut staff bonuses

London - John Lewis has maintained its decision to cut staff bonuses for the fourth year in a row, in favouring of investing in its online business. The announcement comes as the high street retailer announced a 4.9 increase in sales over Christmas, although the company warned that it did not indicate of an easy year to come,

40 percent of John Lewis sales over the Christmas trading period can in through the retailer’s online channel, highlighting the shift in consumers shopping habits. In order to keep up with demand and fulfil Britons demand for online shopping choices such as click & collect, John Lewis aims to invest in its online business, a move which together with the continued effect of a weaker pound is likely to affect the retailer’s profit later in the year.

Approximately 91,500 John Lewis employees received a bonus of 10 percent of their annual salary last year, but are likely to receive a “significantly lower” amount this year, said Charlie Mayfield, chairman of the John Lewis Partnership, owned by employees. The exact size of the bonus is set to be announced, together with John Lewis’s full-year results in March.

Mayfield noted that although John Lewis reported profits up compared to last year, trading profit is under pressure. “This reflects the greater changes taking place across the retail sector,” he said on Thursday. “We expect those to quicken, especially in the next 12 months.” In order ensure the company is ready to adapt to future changes, John Lewis states it must prepare itself now, although the company did not reveal how much it would be investing in strengthening its online channel.

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