John Lewis Partnership axes bonus and warns of job cuts as it swings to loss

JLP chair Dame Sharon White said the impact on staff is “a massive regret to me personally”.

The retailer reported a loss of £234m, including exceptional costs for the year to January 28, 2023, down from a total profit of £181m last year. It blamed the “economic backdrop and inflationary pressures” for the decline.

John Lewis Partnership posted a 2% drop in total sales year on year to £12.25bn. Waitrose sales declined 3% to £7.31bn and John Lewis sales increased by 0.2% to reach £4.94bn.

The group said despite increasing its customer total by 800,000 in comparison to last year to 20 million, “they bought less” than last year.

JLP also attributed the reduction in sales and loss of customers to the online growth of the pandemic years being “partly reversed”, as well as customers opting to shop with the discounters.

The retailer said “the impact of inflation was felt across the business”, which added £179m to its costs over the period.

JLP said it plans to increase margins, focus on the customer and deliver further cost savings this year. It pledged to save £600m in costs by January 2026.

The partnership spent £32m over the year to support staff with a cost-of-living payment and free food during the winter months. It said this year, it will “continue to help with the cost of living in other ways” including support for travel, childcare and other living costs.

White said: “Inflation has had a big impact on the partnership and sent our costs soaring – up almost £180m on last year. We haven’t sat on our hands. We’ve been working hard to drive out costs. Negotiating better deals with suppliers and simplifying ranges in both brands.

“It is also the case that we had some setbacks. Product supply challenges and a major fire in our Brinklow warehouse hit availability in Waitrose last summer. This was recovered through autumn and availability is now strong.

“All in all, this has made for a tough set of results. We made a loss 2 of £78m. When you add in exceptional costs – the biggest one being a write down in the value of Waitrose stores – the loss 3 was £234m. Our balance sheet remains strong – £1bn of cash and access to a £420m credit facility, like an overdraft, if we need it.

“Looking ahead, the external environment is no less uncertain. Even as headline inflation is starting to fall, the partnership is still seeing costs rise.

“As we need to become more efficient and productive, that will have an impact on our number of partners. That’s a massive regret to me personally. It would be difficult enough in any business.

“We’re not just employees; together we own the partnership. That’s a huge responsibility as well as a privilege, in the good times and when it’s tough. I feel it acutely. By seizing the opportunities to transform, we will secure the partnership’s future for another 100 years.”