The owner of John Lewis and Waitrose paid an annual bonus to workers for the first time in four years after underlying profits rose 6%.
Employees at the retail group – which it calls partners – will receive a 2% bonus after it recorded a rise in sales and profits.
Sales rose 5% to £13.4bn and profits rose to £134m in the year to January 31, slightly behind expectations in what chairman Jason Tarry called “a subdued market”.
He said profits had been hit by £40m in additional national insurance contributions and £13m in new packaging taxes. The company suffered a £21m pre-tax loss after exceptional expenses including the write-down of old technology. That compares with a profit of £97m the previous year.
The staff-owned group has not paid a bonus in four of the previous five years, after suffering losses during the Covid pandemic, when it was forced to close all stores during lockdowns.
The company chose not to distribute a bonus last year despite tripling its annual profits.
The retail group is in the middle of a turnaround plan, which has seen 16 department stores and at least 20 Waitrose outlets closed and thousands of jobs axed at its headquarters.
Tarry said: “Our multi-year plan to invest in customers and our brands for the long term is working – we have grown customer numbers and achieved record satisfaction.
“Despite a depressed market, a challenging path into the crucial peak period and increased taxes, we made the decision to continue investing in the business and have generated cash and profit growth.”
Last summer the company indicated in an internal update that staff could receive a bonus if they exceeded the £200m profit target. Several workers had signed an open letter asking employers to recover the bonus.
At its peak during the 1980s, the retailer paid an annual bonus of up to 24% of employees’ salaries.
The company is spending £800m on its stores as part of a long-term investment. Over the past year, more than 20 Waitrose stores have been refurbished, as well as five John Lewis stores.
John Lewis also launched the Topshop brand in all 32 department stores last month as it sought to sharpen the appeal of its fashion floors.
Tarry has also canceled the association’s long-term plan to build up to 10,000 rental properties to focus more on retail.
