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John Lewis boss considers scrapping staff bonuses amid cost of living crisis

A general view of sign on John Lewis on Oxford Street in London, as as the department store reported a 2.7\% rise in like-for-like sales over the Christmas trading period but said that the partnership's bonus is likely to be
Staff at John Lewis have been warned they may not receive an annual bonus this year. (PA)

The head of John Lewis has warned its staff they may not receive their annual bonus this year.

Sharon White, chair of the John Lewis Partnership (JLP), said the cost of living crisis could affect workers' pay packets.

The partnership, which operates John Lewis stores and Waitrose supermarkets, is owned by a trust on behalf of all its employees.

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Some 80,000 workers, or partners, are paid a bonus, or a share of the profit, on an annual basis.

But White said they may not receive it this year because of rising inflation and the soaring cost of goods.

During a speech at the Confederation of British Industry (CBI) in Birmingham on Monday, she was asked if the JLP would be able to pay its partners a bonus this year.

"It is going to be tough, and I think our partners know it is going to be tough," she replied.

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John Lewis Partnership Chair, Sharon White, speaks during a panel discussion at the Confederation of Business Industry (CBI) annual conference at the Vox Conference Centre in Birmingham on November 21, 2022. - The UK's recent austerity budget may avert a deeper recession, but the government must focus more on growth to improve the country's long-term prospects, the CBI will say. (Photo by Oli SCARFF / AFP) (Photo by OLI SCARFF/AFP via Getty Images)
Dame Sharon White, chair of the John Lewis Partnership, speaking at the Confederation of Business Industry conference in Birmingham on Monday. (AFP via Getty Images)

"Many of us are facing some big choices. Retail is not a high wage sector," she added.

"You have got to weigh up those costs with the business being financially healthy."

White said there were signs that John Lewis and Waitrose customers were spending less in the run-up to Christmas than usual.

"For us, inflation is hitting the top line. Customers are more thoughtful about what they are spending, and we are very conscious of our employees.

"We have the same number of customers, but they might be putting one or two fewer things in their basket.

"We have got some customers who are doing their shopping early and have booked their Waitrose delivery slots in advance.

"On the other hand, you can see other customers starting to budget, and shopping is more phased."

Bedford, UK - People outside the main entrance of a Waitrose supermarket in the English town of Bedford.
Workers at Waitrose, which is part of the John Lewis Partnership, have been told they may not receive their annual bonus this year. (Getty Images)

The partnership bonus was halted in 2020 for the first time in almost 70 years because of the coronavirus pandemic.

It returned last year, with staff being handed a 3% bonus, the equivalent of one-and-a-half week's pay.

But the partnership's earnings fell to a loss of £99m in the first half of this year because of the cost of living crisis and soaring inflation.

Last week, the Office for National Statistics (ONS) announced that inflation – the rate at which prices increase – reached 11.1% in October, its highest level for 41 years and up from 10.1% in September.

The ONS said gas prices had increased by nearly 130% over the past year, while electricity had risen by 66%.

In addition, food inflation climbed from 14.5% in September to 16.2% in October, according to the ONS, its fastest rate for 45 years.

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