John Lewis Partnership pledged to reinstate bonuses for staff at 3% and pay the Real Living Wage nationwide after cutting losses last year.
The company said it would pay a bonus of 3% to its ‘partners’, ie all permanent staff, equivalent to 1.5 weeks’ pay, after underlying profits exceeded a target of £150mln and debt was reduced to less than four times profit.
Chair Sharon White and the executive board team said they would donate their bonus to the British Red Cross.
White said it was the “right time” to pay a real living wage, which is a voluntary rate based on living costs and is set for 2022 at £9.90 or £11.05 in London, as staff and the rest of the country are “facing a cost of living squeeze”.
The department store group, which owns the Waitrose supermarket chain, posted a loss before tax of £26mln for the year to 29 January 2022 compared to a £517mln loss a year ago.
Excluding exceptional items, of which there were £161mln in the past year and £648mln in the prior year, underlying profit was up 38% to £181mln.
The improved trading performance was attributed to record sales of £4.9bn for the department store business, which was up 4% on the previous year or 8% on a like-for-like basis, with LFL sales up 10% compared to two years ago.
Sales at Waitrose fell 1% to £7.5bn but were up 1% on a like-for-like basis, with LFL sales up 11% on two years ago.
With the group one year into its five-year transformation strategy, White acknowledged the main issues of the current year would be inflation and energy prices rise, meaning customers are facing higher living costs, which she said would create uncertainties for the business.