John Lewis could axe annual bonus for staff for the first time in 67 years
MORE than 80,000 employees at John Lewis and Waitrose may lose their yearly bonus this year, bosses have warned.
The bonus has been paid out by the John Lewis Partnership, which includes John Lewis and Waitrose, since 1953.
The warning comes as the group revealed that annual partnership profits were expected be to "substantially lower than last year".
The board will meet in February to decide if it's "prudent" to pay the staff bonus, the partnership said.
The decision will depend on its profits, planned investment and the strength of the balance sheet, it added.
If the bonus does get the chop, it will be the first time in 67 years that it has hasn't been paid.
Where does John Lewis & Partners go from here?
Tracey Boles, business editor at The Sun, shares her views on today's announcement.
Profits are down at John Lewis and managing director Paula Nickolds is heading for the exit.
The chain’s annual bonus could also be axed for the first time since 1953.
No wonder Charlie Mayfield, chairman of the John Lewis partnership which also owns Waitrose, calls it the “severest” retail environment for a generation.
It’s difficult to see where the department store group goes from here.
Two reasons profits have been clobbered are not for changing: the “never knowingly undersold” price promise and a commitment to great customer service that means high costs.
The partnership has already cut costs by £300million, with £100million
more to come this year.
Nickolds undertook a big revamp at the 50-strong chain which has seen beauty and fashion sales rise amid a focus on “experiences” such as personal styling.
Her departure after 25 years with the company is something of a shock after she was given a seat on the firm’s revamped board just last Autumn. Waitrose’s boss did not.
But shoppers are cautious amid the recent political and economic uncertainty.
Big ticket items just aren’t shifting at John Lewis.
Mayfield, who is leaving, hopes consumer confidence will grow this year.
For incoming chair Sharon White, let’s hope he’s right.
In January last year, the group also warned that the bonus may be axed despite sales being up over the Christmas period.
In the end, it slashed the bonus to 3 per cent of staff's annual salary - the lowest level since 1953 - when annual profits fell 45.4 per cent.
The bonus began in 1920 and was originally paid out in the form of stocks and shares in the company.
In 1970, it was converted to the cash bonus staff get today.
Bonuses in the 1970s and 1980s were as high as 24 per cent and as recently as 2013 it was 17 per cent.
Every member gets the same percentage, from shelf fillers to executives.
John Lewis Partnership also announced today that its managing director, Paula Nickolds, is stepping down by mutual agreement after 25 years at the group.
She leaves just three months after the managing director of Waitrose, Rob Collins, stepped down following a major restructuring.
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In 2018, John Lewis cut its staff bonus for the fifth year in a row.
Meanwhile, customers have been warned about a WhatsApp voucher scam offering £100 free vouchers.
A few years ago, the store chain was forced to set aside £36million to reimburse underpaid staff.