John Lewis back in profit – but there’s STILL no staff bonus

John Lewis is set to report a surprise return to profit this week as it plans a major round of job cuts.

Figures due on Thursday are expected to show that three consecutive years of losses at the retailer giant have been reversed.

But the 76,000 workers who own the business behind the John Lewis department stores and supermarket Waitrose are again in line to receive no bonus.

The swing in financial fortunes is a boost for the group’s under-fire chairman Dame Sharon White.

She previously warned that John Lewis would not return to a sustainable profit before the 2028 financial year.

Experts said the main reason for turning a profit in 2023 was the impact of an aggressive £900 million cost-cutting programme rather than a fillip in sales at either Waitrose or the department stores.

Both the supermarket and the department store have suffered from years of underperformance.

This was exacerbated by the cost-of-living crisis.

In food, Waitrose has lost market share and is about to be overtaken by a revived Marks & Spencer.

The department stores have struggled since White ditched the business’s ‘never knowingly undersold’ price promise.

Nick Bubb, an analyst at independent investment research company Hardman & Co, said the cost-cutting programme had started to take effect in the second half of last year.

He has pencilled in profits of £25 million for the year to January 2024, compared to a £234 million loss after one-off items the previous year.

But in a sign that John Lewis is not yet out of the woods, staff will miss out on a bonus for the third time in four years.

In a video message earlier this year, White (pictured) told them to prepare for ‘quite big changes and quite bold changes’.

John Lewis ‘will more than break even this year,’ she added. It is considering cutting its workforce by 11,000 – or a tenth – over the next five years and reducing redundancy pay-offs. But it is also raising the pay of shop floor workers by 10 per cent to a minimum of £11.65 an hour across the UK and £12.89 within London from next month.

This week John Lewis may also give an update on the hunt to replace White, 56, who is standing down after five years as chairman. This is the shortest tenure in the partnership’s near 100-year history. She was the first woman to lead John Lewis, but faced controversy after she considered breaking the historic employee-owned structure of the partnership by selling a stake to outside investors to raise money to put into the business. That plan, however, was subsequently dropped.

Her lack of retail experience and her civil service background were also attacked, as were her plans to expand into financial services and property before the core retail activities were fixed.