John Lewis has confirmed that staff will not receive a bonus for the first time since 1953 after being hit by closed store closures.
The retailer – which also owns Waitrose – said it recorded a loss of $ 55 million for the six months to July 25 after rising costs offset a 1% increase in sales.
Its president told staff on Thursday that the announcement “would come as a blow.”
Even before the arrival of Covid-19, the chain had warned it might not pay the usual staff bonus, as competition squeezed profits.
The group’s loss in the first half of the year amounted to € 635 million after taking into account exceptional items, including a depreciation of € 470 million on the value of its stores.
The last time the chain, which operates in partnership, decided not to pay a bonus to its staff, was after World War II.
President Dame Sharon White said: “We have managed to be even stronger and we will do it again.”
She added, “I know this will be a blow to the partners who have worked so hard this year. The decision does not detract from the commitment and dedication you have shown.”
The retailer said store closings during the lockdown and customers buying less profitable items, such as toilet paper or laptops, had hit the business.
He estimated that in the first half of the year, John Lewis stores reported revenue of 200 million, while the larger group saw additional costs related to the coronavirus total around 50 million.
But in a statement, he said Waitrose had seen “a return to the weekly store,” with like-for-like sales at Waitrose removing the effect of new store openings, up 10% from year after year.
Change your buying habits
Dame Sharon said the pandemic had resulted in changes in consumer buying habits “that could have taken five years in five months.”
At John Lewis stores, online sales increased 73% in the six months to July 25, “helping to offset the impact of store closings.” They now represent more than 60% of the overall turnover of the department store chain, against 40% before the outbreak of the pandemic.
The group added that a move towards more working from home had affected people’s purchases, with sales of tablets and TVs increasing, while sales of pants had declined.
The chain also said Waitrose is now delivering around 170,000 food orders per week, up from 60,000 before the lockdown.
Having struggled to cope with competition from online competitors and slowing consumer spending, the group recently announced its intention to close stores.
In September, the group announced the closure of four of its Waitrose supermarkets, with the loss of 124 jobs.
In July, he also announced he would close eight John Lewis stores, putting 1,300 jobs at risk.
It also recently dropped its “never knowingly undersold” price commitment., which had been in place since 1925.
The pledge never applied to sales from internet-only retailers, which have lower costs and often have lower prices than High Street.
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