John Lewis staff bonus under threat despite positive Christmas update
Staff at John Lewis may not be getting their bonus this year, the retailer said on Thursday, as it continues to expect "substantially" lower full-year profit despite a decent Christmas performance.
In the seven weeks to 5 January, gross sales at John Lewis & Partners were up 2.5% from last year to £1.16bn, while like-for-like sales at department stores were 1% higher, with particularly positive performances in fashion, beauty and own-brand womenswear, where sales were up 6.8%, 11.2% and 14.7%, respectively.
Gross margins remained under pressure, however, in an "intensely competitive" pricing environment.
Gross sales at Waitrose & Partners, excluding fuel, were up 0.2% from last year at £1.05bn and up 0.3% higher on a like-for-like basis, despite reduced promotional activity.
The retailer said Black Friday contributed to the biggest sales week in John Lewis & Partners' history, while online sales over the Christmas period at Waitrose & Partners rose 12.8%.
Chairman Charlie Mayfield said: "We continue to expect full year total Partnership profits to be substantially lower this year, driven by slower sales growth over the year and margin pressure in John Lewis & Partners along with higher costs, mainly as a result of our continued investment in our IT capability.
"The actions taken in recent years to prepare for the current pressures in retail mean that the Partnership has the financial strength and flexibility to pay a modest bonus this year, without impacting our ambitious investment programme. However, the board will need to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time."