John Lewis prioritises employee pay and business growth over staff bonus

Retail partnership firm John Lewis recorded profit growth of 73 percent to 97 million pounds (125.6 billion dollars) for the year to January 25, 2025.

Despite this profit surge, the company has opted not to reinstate its staff bonus for the third consecutive year. Instead, the partnership plans to invest these gains into strategic business transformation and enhanced employee compensation.

Chairman Jason Tarry expressed optimism regarding the company's performance, stating, "These are solid results, which show that our customers are responding well to our investments in quality products, value and service. Looking forward, I see significant opportunities for growth from both our Waitrose and John Lewis brands."

John Lewis to reinvest in business and staff pay

The results mark a significant financial improvement for the retail conglomerate, which includes the department store John Lewis and the supermarket Waitrose.

The company's decision to forgo the staff bonus is directly tied to a plan to invest 114 million pounds in increased pay for its 69,000 employees and up to 600 million pounds in overall business transformation initiatives.

The company recently announced a 7.4 percent pay rise for its employees this year.

John Lewis maintains sales momentum amid challenging environment

The partnership's financial results demonstrate positive sales momentum, with overall sales rising by 3 percent to 12.8 billion pounds. The operating profit margin also improved, reaching 2 percent, up from 1.1 percent the previous year.

Specifically, John Lewis sales remained consistent at 4.8 billion pounds, with an adjusted operating profit of 45 million pounds, achieved amidst a challenging retail landscape.

The company attributed this performance to strategic investments in customer value through initiatives like the return of the "Never Knowingly Undersold" promise, enhanced customer service, and improved product ranges. While the first half of the year saw a slight decline in sales and operating profit due to growth investments, the second half experienced a notable rebound, resulting in increased sales and adjusted operating profit.

Looking ahead, John Lewis anticipates continued macroeconomic challenges but remains confident in its strategic direction, projecting further profitability growth in the 2025/26 fiscal year.