John Lewis staff set for 15% bonus
John Lewis and Waitrose staff are set for bonuses worth 15% of their salaries on Thursday as the retail chain marks a return to profits growth.
But retail analyst Nick Bubb, who is pencilling in a 17% hike in profits to £415 million on Thursday after a "bumper" Christmas, said staff were poised to see a "small increase" in the percentage of salary bonus which is received by each worker - from weekend check-out assistants to chairman Charlie Mayfield.
The group reported a 60% surge in first-half profits to £145 million at its half year but warned in September that profit growth would be much slower in the second half.
Mr Bubb said second half profits would be flattened by a big swing to lower-margin electrical goods and intense competition in food retailing as well as significant growth in operating costs from online delivery and distribution. But he said John Lewis would be "in very good heart" given the disarray among its major competitors and the strong start to trading in the new year.
John Lewis has recently hailed its website as a key reason for its success, with johnlewis.com breaking through the £800 million barrier over the crucial Christmas trading period in the five weeks to December 29.
Following the success of collection points in 234 department stores and Waitrose supermarkets, John Lewis last month announced a deal with delivery and returns business CollectPlus to allow customers to return and collect online shopping at a network of 5,000 local shops and petrol stations.
But the move online will be at the expense of management jobs after it announced last month that it plans to cut 325 department store manager posts over the next few years. Even so, the group also said it will invest more than £50 million in its stores this year as part of its commitment to "bricks and mortar" retailing.
Mr Bubb is predicting operating profits at its supermarket brand Waitrose will be up 14% to £298 million and the Partnership's 39 department stores should bounce by 33% to £211 million.
He also predicted that John Lewis will report strong current trading with like-for-like sales in the five weeks to March 2 up just under 14% against a "relatively soft" comparison, while Waitrose sales should be up 6.5% excluding petrol.