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John Lewis has reported a return to profit, but it will not pay its staff a bonus for the second year in a row.
The retail partnership, which also owns Waitrose supermarkets, reported a pre-tax annual profit of £56m compared with a £234m loss the year before.
However, it said it would not pay a bonus as it was increasing overall pay and investing in the business.
It is only the third time since 1953 the group has not paid its staff an annual bonus.
Releasing its annual results for 2023, the partnership said that a million more customers shopped in its stores last year, spending £12.4bn – up 1% on last year.
Sales at Waitrose rose by 5% to £7.7bn, with a record number of customers choosing to shop at supermarket chain, it said.
However, spending in its John Lewis stores was down 4% to £4.8bn.
Sales of fashion and beauty products did well, but it saw weaker sales in home and technology.
The group said it had cut costs by £88m over the past financial year, with changes to staff hours and “simplified ways of working” across its shops and central teams.
Deep cuts to its workforce will produce more savings. At the start of the year it signalled further job losses – with a reported 10% cut to personnel, accounting for around 11,000 positions.
Plans to refurbish 80 Waitrose supermarkets and open a string of new branches would allow for “continued improvement” in profit this year, the group said.
But chair of the partnership, Dame Sharon White, said suggestions John Lewis and Waitrose should split would not be good for the business. She told BBC’s Today programme the results showed their plan was working.
“We’ve got so many customers who shop across the two, love both, and the fact that we’re back to profit, the fact that customer numbers are growing, our debts are down, we’ve got the balance sheet and the firepower now to invest, you know, record levels over the next year.”
She said the turnaround was “a great testament to the fact that we are stronger together”.
The results come after a turbulent year for the company.
In October, Dame Sharon said she would be stepping down from her position at the end of her five-year term in 2025. Her tenure as chair is the shortest in John Lewis’s near 100-year long history.
Earlier in the year, reports suggested that the partnership was considering selling off a minority stake in the business, meaning it would no longer be fully-owned by its employees.
Dame Sharon later ruled out the move, but said the board could consider external investment in future if it was needed.
John Lewis department stores have faced stiff competition in recent years on the High Street, resulting in a series of store closures, while Waitrose has also been perceived as underperforming.
In January, John Lewis said it was planning further cuts its workforce over the next five years in order to boost profitability.
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