John Lewis staff lose bonuses amid drop in customer spending

The staff-owned partnership, which also owns Waitrose, saw a total loss of £234m in the year to 28 January as the group experienced inflationary setbacks.

Despite Waitrose reporting more shoppers in the year, full-year sales fell by 3% to £7.31bn.

Dame Sharon White, the chairman, wrote in a memo to staff that this “means we won’t be able to share a bonus this year or do as much as we would like on pay.”

"You’ve been exceptional in what has been another very tough year. Two years of pandemic and now a cost of living crisis," she said.

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"I know you’re feeling the impact of higher inflation, and I hope the £500 (pro rata) cost of living payment and free food over the winter helped."

In September, the company announced it would give a one-off cost-of-living crisis payment to staff, known as partners, of £500 for full-time workers, with a pro-rata amount for part-time workers, along with free food while on shift.

Dame Sharon said:  "We’ll continue to help with the cost of living in other ways - the financial assistance fund will stay at £800,000 (a doubling) and there is support for travel, childcare and living costs."

The losses mean bonuses could not be issued this year for the second time since it began the scheme in 1953.

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In 2020, John Lewis scrapped its bonus scheme for the first time since 1953 as department stores closed because of the lockdown.

The owner of John Lewis and Waitrose has appointed Nish Kankiwala as its first group chief executive as it struggles to turn around the business.

White said: “Since joining the board in 2021, Nish has developed a deep understanding and appreciation of the partnership model and has provided counsel on our transformation. He will be able to supercharge this in his new role while protecting the partnership’s ethos.

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“Nish and I will work closely to ensure the partnership thrives for another century. The new structure allows me to focus on the preservation of the partnership model and our distinctive character, on the strategy for the partnership and our big commercial choices.

"Nish will draw on his significant transformation experience to drive performance and profitability day to day.”