John Lewis swings back into the red

(Sharecast News) - John Lewis Partnership has returned to profit, the retailer confirmed on Thursday, but said it would not pay staff bonuses for the second year running. Total revenues in the year to 27 January came in at £10.8bn, up from £10.5bn a year previously.

Sales at the John Lewis department stores fell 4% to £4.8bn, but sparked 5% at supermarket chain Waitrose to £7.7bn. Prices rose by 6.6% on average at the grocer.

Group operating profits were £147m, compared to losses of £160m a year ago, while pre-tax profits were £56m. Last year John Lewis posted pre-tax losses of £234m.

John Lewis has endured three years of losses, as it battled surging competition and higher costs.

Under chair Sharon White, who joined in 2020 from regulator Ofcom, the company has launched a turnaround programme, including cutting costs, shutting under-performing stores, axing jobs and pausing the annual partnership bonus.

However, the retailer - the UK's largest employee-owned company - said it would not reinstate the bonus this year, despite moving back into the red.

It noted: "After careful consideration, we believe that investing in partners' pay and improving our business must continue to take priority over paying a bonus.

"Consequently there will be no partnership bonus paid this year."

It is only the third time since 1953 that John Lewis has not paid the annual bonus.

White said: "We had made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses. We expect profits to grow further this year.

"This year we will unashamedly focus on investing back into our retail businesses for our customers, including opening new Waitrose shops and continuing to modernise our brand offering in John Lewis while prioritising pay for our partners."