As the undisputed champions of the Christmas season, it is hardly surprising to learn that staff members of the John Lewis Group have earned a 17 per cent bonus for their performance in 2012.
While the John Lewis department stores themselves broke records for sales in the weeks leading up to Christmas, especially in the field of electronics, Waitrose managed to draw in consumers with luxury food items to compliment the dinner table.
Around 84,700 staff are expected to benefit from the generous bonus scheme, with this year’s pool worth £210 million. This means that the single bonus payment they are due to receive this month will be worth the equivalent of nine weeks pay.
2012’s annual bonus has increased by 3 per cent from the amount paid for 2011 last year, when John Lewis Group employees received a 14 per cent addition to their pay packets. This is because pre-tax profits for 2012 totalled an impressive £409 million – an increase of 15.8 per cent when compared to the previous trading year.
Group chairman Charlie Mayfield said; “This has been a good year for the partnership with growth in sales and profit above our expectations.
“Both Waitrose and John Lewis gained market share for what is now the fourth consecutive year.”
Furthermore, Mr Mayfield believes that this extraordinary performance will continue in 2013, despite the fact that market forecasters have predicted a further tough year for the retail industry.
John Lewis is something of an anomaly in the retail industry, given that the business is owned by its employees. This is why they receive annual bonuses and, as such, are encouraged to perform to the best of their abilities in order to reap the rewards at the end of the year.
As a result, this could be one reason for John Lewis’s success last year. However, the growth in internet shopping has also played a huge role in the improving fortunes of John Lewis, as online trade now accounts for around 25 per cent of the company’s overall sales.
Johnlewis.com saw sales increase by over 40 per cent last year, for example, while Waitrose’s online division reported a sales spike of almost 50 per cent in the past 12 months.
Mr Mayfield believes that these increases in both online and commercial property sales will increase in the coming year.
He concludes; “Although the market remains subdued we see more stability in consumer demand and further opportunities to grow market share.”
Do you think the success of the John Lewis Group is due to the employee ownership scheme, or is it because consumers trust the established chain to offer them the best quality for money in a time where money is tight for most of us?
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