John Lewis staff have been warned that they may not receive a bonus this year after a tough Christmas period for the department store chain.
The John Lewis Partnership is owned by the company’s 80,000 employees, who are eligible for a share of the company’s profits, usually paid as a bonus.
In the past the business has performed so well that members of staff have enjoyed bonuses of 15% of their salary. However, figure has fallen for the last five years, with staff only receiving 3% in 2019.
But Sir Charlie Mayfield, chairman of the John Lewis Partnership, has warned that staff may not get a bonus at all this year.
He said: “At the full year, we expect profits in Waitrose & Partners to be broadly in line with last year. In John Lewis & Partners we will reverse the losses incurred in the first half of the year, but profits will be substantially down on last year. We therefore expect that partnership profit before exceptionals will be significantly lower than last year.”
He added: “The partnership board will meet in February to decide whether it is prudent to pay a partnership bonus.
“The decision will be influenced by our level of profitability, planned investment and maintaining the strength of our balance sheet.”
Sales during the seven weeks to January 5 fell by 2% on a like-for-like basis.
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The poor performance has led to managing director Paula Nickolds leaving the company.
Ms Nickolds has worked at the company since 1994 and was set to take over a bigger role at the company as the partnership’s new director of brand. This would have seen Ms Nickolds lead both John Lewis and Waitrose.
Sir Charlie said: “After some reflection on the responsibilities of her proposed new role, we have decided together that the implementation of the future partnership structure in February is the right time for her to move on and she will leave the partnership with our gratitude and best wishes for the future.
“At the full year, we expect profits in Waitrose & Partners to be broadly in line with last year. In John Lewis & Partners we will reverse the losses incurred in the first half of the year, but profits will be substantially down on last year.
“We therefore expect that partnership profit before exceptionals will be significantly lower than last year.”