JOHN Lewis’s partners will share a reduced bonus pot equal to 15 per cent of the average staff salary as the retailer put more money aside to shore up its huge pension fund.
The £202.5m bonus, which was announced to 91,000 John Lewis and Waitrose staff yesterday at stores across the country, is equivalent to almost eight weeks’ pay, or around £2,225 for average full-time employees.
But the windfall was lower than last year’s £210m bonus payout equal to 17 per cent of salary, due to the increased cost of servicing its huge pension deficit, which increased 22.1 per cent to just over £1bn at the end of the financial year.
The bonus was revealed alongside a 9.6 per cent jump in pre-tax and pre-bonus profits to £376.6m in the year to 25 January on record sales of £10.1bn, which overtook those at rival retailer Marks and Spencer for the first time.
Bottom-line profit fell 4.1 per cent to £329m as it spent £47.3m compensating staff after discovering an error in the way it had calculated pay for Sundays and bank holidays.
John Lewis department stores reported record sales of £4bn, up 7.5 per cent on the previous year while like-for-like sales grew by 6.4 per cent.
Sales at Waitrose jumped six per cent to £6.1bn as the group added 13 new stores including five of its Little Waitrose convenience stores. Like-for-like sales grew by 5.1 per cent.
Waitrose chief executive Mark Price said it will increase capital expenditure from £300m to £400m this year as it plans to open 38 branches and invests in building a new dark store in London to serve its fast-growing online business.
Waitrose, as well as discounters Aldi and Lidl, has been outperforming the grocery market and grew its market share to a record five per cent last year as its mid-market rivals continued to be squeezed.
The upmarket grocery plans to stage a further assault on its rivals by introducing more hospitality services such as wine tasting and dry-cleaning as well as introducing more concierge-style welcome desks in its stores.