John Lewis Partnership, which owns its namesake department store chain as well as supermarket chain Waitrose, has cut its staff bonus scheme after posting a loss in its most recent full-year results ended January 28, 2023.
The company posted a loss before exceptional items and tax of 78 million pounds, down from a profit of 181 million pounds a year earlier, which it said was primarily due to the economic backdrop and inflationary pressures.
Meanwhile, the company’s more significant loss before tax widened to 234 million pounds from a loss of 27 million pounds a year earlier, which included exceptional items, most notably a write down in the value of Waitrose stores.
“Shoppers felt the pain of inflation,” said John Lewis Partnership chair Sharon White in a statement. “I am sorry that the loss means we won’t be able to share a bonus this year or do as much as we would like on pay.”
Revenue down at John Lewis Partnership
It came as total sales at the partnership dropped 2 percent to 12.25 billion pounds, down 3 percent to 7.31 billion pounds at Waitrose, but up slightly by 0.2 percent to 4.94 billion pounds at John Lewis.
However, John Lewis sales for the year were down 0.3 percent on a like-for-like basis, while volumes were up 1 percent for the year, supported by a strong performance from the branches, which were up 20 percent.
John Lewis’ trading operating profit fell by 82 million pounds to 676 million pounds, due to trading dynamics and inflation, partially offset by cost savings.
The retailer saw an increase in store footfall during the year under review, and a 13 percent increase in shopping through its online app. Over a quarter of online sales are now through the app, it said.
Footfall to stores grew 34 percent reaching 100 million for the first time since before Covid, while online traffic was down 5 percent on last year.
The company’s fashion and technology segments drove the largest sales by 37 percent and 36 percent of the sales mix, respectively. Home has been relatively consistent for the last four years at 27 percent.
The trading update comes a day after the partnership appointed board member and turnaround expert Nish Kankiwala as its new and first ever chief executive officer, effective March 27, amid the company’s ongoing transformation.