Commercial property department store John Lewis and supermarket chain Waitrose staff saw their bonuses cut for the first time in three years as the employee-owned group proved it was not exempt to the harsh economic climate.
John Lewis Partnership, which has more than 75,000 staff, will get an extra seven weeks pay in this month’s pay package in comparison with nine weeks they picked up in 2011.
The commercial property company revealed a pay-out of 14 per cent of salary from a bonus pot of £165.2 million, compared with 18 per cent in 2011 from a bonus pot of £194.5 million.
Every worker-from weekend check-out assistants to Chairman Charlie Mayfield, receives the same percentage of salary as a bonus.
The partnership’s yearly results are a red letter day for staff and there were no complaints among the 800 John Lewis employees as its newest branch, in the Westfield Stratford City commercial property shopping centre that backs on to the Olympic Park in east London. The amount was met with appreciation and whoops of joy as shopping sprees and exotic summer holidays were brought within reach.
Adam Richardson, a John Lewis partner, said: “A bonus is a bonus. I’m not disappointed in the slightest as we can see that other retailers are struggling.”
Wendy O’Mahoney, who was out of work for four years before getting a job at the commercial property centre’s Waitrose branch when it opened last year, said: “It’s more than I expected, I am really happy, it’s my first bonus so I am really chuffed. I am going to spend, spend, spend.”
The lower bonus came as the commercial property group recorded a 4 per cent fall in pre-tax, pre-bonus revenues to £353.8 million after attempts to bring in more customers through its price-matching campaigns and fierce discounting elsewhere on the high street hit earnings.
Mr Mayfield commented: “Profound changes are taking place in the retail sector and importantly this was a year when we upped the pace of innovation and investment.”
He further added: “That came at the price of some short-term profit but leaves us in a good place at the start of this year.”
Mr Mayfield said company sales were 7.7 per cent greater than last year in the five weeks since the end of the reporting period, January 28, and is “cautiously optimistic” the trading environment will progress this year.
He said events such as the Queen’s Diamond Jubilee and the London 2012 Olympics and Paralympic Games would hopefully lift the spirits of customers.
In the five weeks since the end of the reporting period both commercial property chains had enjoyed like-for-like sales of more than 2 per cent.
Supermarket chain Waitrose, which has 273 commercial property branches and saw its market share rise by 0.2 per cent to 4.1 per cent in the period. This was aided by successful tie-ups with Heston Blumenthal and Delia Smith, ringing up an further 400,000 transactions a week and achieving a 7.9 per cent increase in sales exclusive of VAT to £5.1 billion.
Yet, operating profit for the year was down 5 per cent to £260.6 million. The drop was blamed on large investments in 29 new commercial property branches as well as a so-called “dark store” in London that is not open to the public but instead used to pick up internet orders.
The 35 department stores, including six At Home commercial property outlets, saw sales rise 1 per cent to £2.79 billion, however operating profit fell 20 per cent to £157.9 million.
Andy Street, John Lewis Managing Director said the commercial property department store’s “never knowingly undersold” policy, which sees it match rival’s special offers, had cost it nearly £24m during the year and was a key factor behind its weak financial performance.
The partnership said earnings were also hit by the opening of a new commercial property store in London’s Stratford.
Looking forward, the group will open it’s first smaller format commercial property department store in Exeter in October, as well as a full upgrade of the johnlewis.com website.
Managing director of John Lewis Cardiff, Chris Earnshaw, said: “Although 2011 proved to be a challenging year in retail, John Lewis Cardiff continued to provide high standards of quality and service to its customers.”
He further added: “We experienced outstanding festive sales and online sales in our catchment were also strong. In 2012 we will continue to focus on staying true to our trading principles and close to our customer, making their needs a priority and the shopping experience second to none.”
Previous Post
Commercial Property Chain Tesco to Create 20000 New Jobs
