John Lewis Partnership profits triple but skips staff bonus

John Lewis Partnership has tripled its profits to £126m but staff at the employee-owned group have missed out on a bonus for the third year in a row.

The retail group reported sales had nudged up 3% to £12.8bn in 52 weeks to 25 January as its profits rocketed from the £42m before exceptional items it reported the year before.

Waitrose sales grew 4.4% to £8bn and volumes rose 2.6%, helping to double its adjusted operating profit to £227m.

The Partnership attributed the growth to its £61m investment into lowering prices, improved quality food proposition and store modernisation programme which saw 14 refurbishments last year.

At John Lewis, sales remained flat at £4.8bn while adjusted operating profit slipped to £45m.

The Partnership said the past year had been “pivotal” for the department store business in what remains a “challenging environment” for the sector.

However, it reported Christmas sales were up 4.1% over the eight-week peak and the relaunch of its Never Knowingly Undersold has helped drive incremental sales and attract new customers.

Despite the tripling profits, John Lewis said it would not pay a bonus as it prioritised investing £114m into base pay.

“We’ve consistently said that at this point in our transformation, this is best served by investing in our retail businesses and in Partners’ base pay,” it said.

“So after careful consideration, we do not believe it would be right to award a Partnership Bonus this year.”

The retail group said it expects the macroeconomic environment “to continue to be challenging for out customers and our business” but added that it was confident in its ‘Brilliant Retail’ strategy.

The business is again investing £600m into its operations this year, which include store refurbishments and openings, technology upgrades and supply chain modernisation.

John Lewis Partnership chair Jason Tarry said: “These are solid results, which show that our customers are responding well to our investments in quality products, value and service. We have made good progress with much more still to do.

“Looking forward, I see significant opportunity for growth from both our Waitrose and John Lewis brands. Our focus will be on enhancing what makes these brands truly special for our customers.

“This will involve considerable catch-up investment in our stores and supply chain, underpinned by a strong focus on the core elements of great retail, delivered by our brilliant Partners.”

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