John Lewis Partnership has reported a return to profit for the year to January, thanks to sales growth and stronger margins, but said staff will not be paid bonuses once again.
Pre-tax profit sat at £56 million for the year, the Waitrose owner reported on Thursday, compared to a £234 million loss in 2022.
This was as sales across both its John Lewis and Waitrose stores climbed by a combined 1% to £12.4 billion, with operating margins growing by 1.2%.
However, John Lewis said staff would not be paid a bonus for the second year running, as business and other pay improvements “must continue to take priority”.
“As employee-owners, we have a shared responsibility to ensure the partnership is sustainable into the long-term,” the company said.
“We've consistently said that at this point in our transformation, this is best served by investing in our retail businesses and in partners’ base pay.
“So after careful consideration, we do not believe it would be right to award a partnership bonus this year.”
John Lewis unveiled plans to invest £542 million this year including store openings and refurbishments, with the focus on technology and “simplifying” how shops work.
New Waitrose shops will open as part of this, while some 80 fresh brands will be introduced in John Lewis, including strengthened own-brands and homeware.
This is after like-for-like sales at Waitrose climbed by 5% to £7.7 billion last year, but fell 4% at John Lewis to £4.8 billion on the back of weaker demand for its home and technology offerings.
“We have made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses,” chair Sharon White commented.
“We expect profits to grow further this year. This shows our plan is working, while we know there's much more to do.”