The John Lewis Partnership has published its annual results yesterday, revealing a 21.9 % dip in profits and a staff bonus of just 5% – the lowest in 64 years. The trading update, for the year to 27 January 2018, showed that total sales across John Lewis and Waitrose increased two per cent to £11.5 billion, while profits before partnership bonus, tax and exceptional items dropped 21.9 per cent to £289.2 million. The company attributed the drop in profits to lower gross margins in Waitrose “driven by the weaker exchange rate and commitment to competitive pricing”. The retailer also announced that its 84,000 employees (or partners), will receive a bonus of 5%.
However on a more positive note, the financial report did highlight investment in the Waitrose website in order to make navigation easier, which has seen the retailer’s online grocery operation achieve strong profitable sales growth of 10.9% – with a marked acceleration in the second half of the financial year. Over the course of the 12-month period, John Lewis also introduced a number of new delivery initiatives, including two-hour delivery slots, online order tracking, and the ability to see more detailed product information and branch stock availability online.
Charlie Mayfield, chairman of the John Lewis Partnership, said: “As we anticipated, 2017 was a challenging year. Consumer demand was subdued and we made significant changes to operations across the partnership which affected many partners.
“However, their hard work throughout the year was key to delivering gross sales of £11.60 billion, up two per cent, with like-for-like increases in both Waitrose and John Lewis. However, profit before partnership bonus, tax and exceptional items was down 21.9 per cent, mainly as a result of intensifying margin pressure in Waitrose.”
