John Lewis Partnership has confirmed it will not pay a staff bonus next year after it posted a half-year loss of £635m.
It is the first time in more than 60 years that workers at the employee-owned business will not receive a pay-out, which was last axed after in 1948 in the aftermath of the Second World War and remained at zero until 1953.
The partnership has like other retailers been battered by the pandemic – axing more than a thousand jobs as it closes some stores for good.
Its John Lewis department store chain suffered a 10% fall in sales for the six months to July – in contrast to the partnership’s supermarket business Waitrose, where sales rose by nearly 10%.
Dame Sharon White, chair of JLP, said its worst-case scenario remained a 5% fall in sales at Waitrose and 35% at John Lewis for the full year with the most likely outcome a “small loss or a small profit”.
Partners had already been warned in April that they were unlikely to see a bonus in 2021 and Dame Sharon said the board had now confirmed “that there will not be a bonus next year given our profit outlook”.
She added: “I know this will come as a blow to partners who have worked so hard this year.
“The decision in no way detracts from the commitment and dedication that you have shown.
“The partnership found itself in a similar position in 1948 when the bonus was halted following the Second World War.
“We came through then to be even stronger than before and we will do so again.”
Dame Sharon said that “outside of exceptional circumstances” JLP would expect to start paying a bonus again once profits exceed £150m and debt falls and that once profits top £300m it would expect the bonus to be at least 10% of salary.
JLP has been trimming its once-generous staff bonuses – which stood at 17% in 2013 – in recent years, with a cut this year to 2%.
But until now it has avoided axing the pay-out completely.