John Lewis staff share in £194.5m bonus pot

The employee-owned firm said a strong year for its department stores and supermarket Waitrose meant its 76,500 staff will share a bonus pot of £194.5m, up from last year’s pool of £151m.

Chairman Charlie Mayfield announced plans to create 4,300 jobs this year and invest £600m in the business, but warned trading would be more difficult in 2011.

The bonus payout came as the partnership posted a 20 per cent rise in pre-tax profits to £367.9m for the year to January 31, as sales soared 10.6 per cent to £8.21bn.

As has become tradition, John Lewis partners gathered yesterday morning before their stores opened and were told the bonus they will receive this year – 18 per cent of their salary, roughly nine weeks’ pay.

The store’s managing director and a chosen star performer or long-serving partner unveil the payout – to applause and cheers from the assembled employees.

John Lewis department stores have outperformed rivals recently as its more affluent consumers were able to cope better during the recession. The group performed well through the freezing conditions that swept the country in December, but weekly sales figures since the end of January have suggested customers are starting to spend more cautiously.

But five weeks into the new financial year, Partnership gross sales were still 6.5 per cent higher than last year, as both Waitrose and the department stores posted growth.

Mr Mayfield said the Partnership benefited from its multi-channel approach, including its department store website JL.com, which saw sales grow 38 per cent to £538.2m, as well as Waitrose Deliver and its supply relationship with online grocer Ocado.

John Lewis department stores posted like-for-like sales growth of 10 per cent during the year, with operating profit returning to pre-recession levels after increasing by 22 per cent to £201.2m.

The group said sales were driven by growth in most departments, with fashion up 15 per cent, home ahead 12 per cent, and electricals and home technology lifting 8 per cent.

A further three ‘at home’ shops opened in Croydon, Swindon and Tunbridge Wells in 2010 and another three openings are planned this year. A new John Lewis department store on the Olympic site at Stratford, in east London, will open later this year.

Elsewhere, Waitrose saw food sales on a like-for-like basis grow 4 per cent, excluding petrol, while operating profits increased 3 per cent to £274.9m.

Twenty new branches opened during the year, including nine convenience stores, plus three relocations.

But looking ahead, Mr Mayfield warned the VAT increase, rising unemployment and public sector spending cuts would have an impact on consumer spending.

He also warned input price inflation was a threat.