The upbeat assessment followed the news that the firm has cut its staff bonus for a fifth consecutive year. John Lewis and Waitrose staff will see bonuses cut to 6 per cent of their annual salary after the John Lewis Partnership warned of an “increasingly uncertain market” this year.
One bright spot is the new Leeds store, which has created 500 jobs in the area.
John Lewis’s new managing director Paula Nickolds told The Yorkshire Post: “Leeds is our most experience led store. This year we will open a roof-top restaurant that will take advantage of the fantastic views of Leeds and make the most of the city’s night life.
“Our Leeds store is all about creating a destination – a day out experience. That’s what department stores were all about. I’m delighted with all the elements of the Leeds store.”
John Lewis Leeds is the retailer’s third store in Yorkshire. Representing a £37m investment in Leeds, the 255,000 sq ft site anchors Hammerson’s Victoria Gate development. The shop features more than 350,000 products across fashion, home and technology.
The store is the retailer’s most service-led shop, offering more than 30 services, such as a beauty spa, a foreign exchange and home design service.
Ms Nickolds said the news of the staff bonus received “cautious applause” from staff – known as partners – who were told in January that their bonus would be “significantly lower” than last year in the face of a challenging market outlook. This has been partly linked to the collapse in the value of the pound since the Brexit vote.
The cut will see 86,700 staff across the John Lewis Partnership share an £89.4m bonus pot, down from £145m last year.
The figure is down from the 10 per cent of salary bonus last year, 11 per cent in 2015, 15 per cent in 2014 and 17 per cent in 2013.
The percentage payout is the lowest since 1954 when 4 per cent was paid.
Chairman Sir Charlie Mayfield said: “Bonus is lower because the board has decided to retain more of our annual profits in order to strengthen our balance sheet.
“This allows us to maintain our level of investment in the face of what we expect to be an increasingly uncertain market this year, while absorbing the costs associated with adapting the partnership for the future.”
The company said that the weak pound will hit it in the year ahead, while also pointing to competition in the retail sector.
Asked whether the group would pass price increases on to customers, Ms Nickolds said: “We are never knowingly undersold so we will be the last retailer to move (on price).”
John Lewis Partnership, which is owned by the employees of the two retail chains, reported pre-tax profits before exceptional tems of £370.4m for the 52 weeks to the end of January 28, a 21.2 per cent increase on last year.
Like-for-like sales at John Lewis rose 2.7 per cent over the year, while they dipped 0.2 per cent at Waitrose.
The department store chain said in January it would axe nearly 400 jobs across its restaurants and home fittings service as it grapples with acute pressures facing the retail sector.
Sir Charlie said that the firm is “seeking significant cost reductions”, especially in contract labour and consultancy support.
He added that the partnership began limited trials of “robotic process automation” last year and expects to see these develop into a “significant productivity initiative during 2017”.