John Lewis staff get 28% bonus boost
The bonus pot for John Lewis and Waitrose staff has leapt 28% with average payments expected to exceed £2,500.
Booming profits at the John Lewis Partnership, despite a wider slowdown in High Street sales, has driven the rise, with workers being rewarded with bonuses worth 18% of their salaries.
The organisation, which is owned by its employees, said a strong year for its department stores and supermarket Waitrose meant its 76,500 staff will share a bonus pot of £194.5m, up from last year's pool of £151m.
The partnership posted a 20% rise in pre-tax, pre-bonus profits to £367.9m for the year to January 31, as sales soared 10.6% to £8.21bn. Operating profit was up 10.6% to £431m, although some analysts had predicted a figure as high as £450m.
Sales at Waitrose 244 stores were up 9.8% to £4.97bn - with like-for-like sales up 4%. The supermarkets made an operating profit of £274.9, up 3%.
The firm estimated that the recruitment of TV chefs Delia Smith and Heston Blumenthal as 'brand ambassadors' last March had generated 'substantial incremental sales' of around £50m.
Sales at John Lewis, which has 32 stores, were up nearly 12% to £3.23bn - with like-for-like sales up 10%. Operating profits was up 22.2% to £201.2m.
The growth comes despite fears of a slowdown on the High Street amid slow recovery from recession and the government's austerity measures beginning to kick in.
The upmarket position of John Lewis and Waitrose should in theory make its stores more vulnerable than other retailers during such tough conditions but the company has stunned rivals with its growth.
The real winner for the group was online with JohnLewis.com sales up 38% to £538.2m. This driven by fashion with new brands such as Ghost, Armani and Mint Velvet performing well, the company said.
Recipe for success: Delia Smith and Heston Blumenthal boosted sales by £50m
The company also extended its Never Knowingly Undersold (NKU) pricing commitment online last year, although this attracted criticism with the company accused earlier this year of using a small-print clause to avoid sticking to it.
It inserted a clause that says it matches the price charged by others only if they offer the same level of guarantee. The clause also rules the price promise is void if – unlike John Lewis – the cheaper rival charges for delivery.
John Lewis has made developed a huge online market for itself in selling electrical goods in recent years.
Chairman Charlie Mayfield said: 'The partnership has clearly established itself as a leader in multi-channel retailing.
'Our investment over many years in JL.com and our growing presence in Waitrose Deliver together with our supply relationship with Ocado, have brought our offer to more people in more parts of the country and these initiatives have been at the forefront of our growth and innovation.
'We have made great progress this year in combining our John Lewis online operations with our shops to offer our customers greater choice and flexibility.'
Last month, shares in Ocado Group plunged after John Lewis's pension fund bailed out of its massive holding in the upmarket groceries delivery firm.
The fund sold its 10.4% stake in Ocado for about £152m. The exit has provoked speculation that Ocado's business relationship with Waitrose could come under strain.
Ocado has a 10-year agreement with Waitrose to supply its products but Waitrose is expanding its own online service into Ocado's heartlands in central London.
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