The owner of John Lewis and Waitrose has tripled its annual profits but workers at the staff-owned retail group have missed out on a bonus for a third year in a row.
The John Lewis Partnership said group sales rose 3% to £12.8bn in the 12 months to 25 January 2025, as underlying profit rose from £42m to £126m and sales growth picked up through December and January.
However, the company said it was prioritising investment over the bonus with plans to spend £600m on new Waitrose stores, more technology, revamping beauty halls in its Solihull, Bluewater and Liverpool department stores and improvements in its supply network.
Jason Tarry, the chair of the John Lewis Partnership, said: “These are solid results, which show that our customers are responding well to our investments in quality products, value and service. We have made good progress, with much more still to do.”
He said investment in weekly pay was most important to workers, who have just been given a 7.4% pay rise. He added: “I am determined to pay a bonus as soon as we possibly can, but that will depend on where we are at the time and the conditions we face.”
The retailer, which admitted it reduced the average number of people it employs by about 4,000 to 69,000 people last year after a 3,500 reduction the year before, has now skipped the bonus to workers in four out of the last five years, after diving to a loss during the Covid pandemic when it was forced to close all stores during lockdowns.
The finance director, Andy Mounsey, said that as the business used technology to become more efficient, “it is inevitable that we will need fewer jobs” but added there would be enough staff where needed and “redundancies are always the last resort”.
The group is in the midst of a tough turnaround plan, in which 16 department stores and at least 20 Waitrose outlets have been closed and thousands of head office staff jobs cut.
The company said it had made £255m of savings during the year and was on track to make a further £233m by next year despite £40m in additional costs from changes to national insurance contributions announced in the October budget.
Mounsey said the company had not changed its plans in the light of the budget and had become used to tackling cost rises in recent years.
John Lewis said sales at its department stores had remained steady at £4.8bn after a 3% fall in sales in the first half of the year was offset by a 3% rise in the second half, with a strong Christmas. However, operating profit for the chain slumped to £45m, from £689m a year before, after it reintroduced the “never knowingly undersold” price-matching promotion and customers bought more low-profit technology rather than fashion.
Waitrose sales rose 4.4%, as the upmarket grocery chain sold 2.6% more products after sharpening its prices and ensuring fewer gaps on shelves. Profits rose by £122m to £227m as a result of “productivity improvements”, including more careful allocation of staff working hours. James Bailey, the boss of the supermarkets, said more Waitrose stores were on the way, adding “we do believe the best is yet to come.”
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The group said it expected to increase profits further this year and was on track to make £400m by 2028 despite expecting “the macroeconomic environment to continue to be challenging for our customers and our business”.
Tarry said the two brands required “considerable catchup investment in our stores and supply chain”.
However, he added: “Looking forward, I see significant opportunity for growth from both our Waitrose and John Lewis brands. Our focus will be on enhancing what makes these brands truly special for our customers.”
Staff at the group – who jointly own the business – had hoped that Thursday’s annual results, the first presented by the former Tesco executive Tarry after six months as chair, would include an annual bonus for workers.
