Afternoon:
9°c
£151m staff bonus bonanza as John Lewis profits soar
Jonathan Prynn, Consumer Business Editor11 Mar 2010
About 70,000 John Lewis workers shared a £151 million bonus pot today after the retail giant recorded record profits.
The group, which also runs Waitrose, revealed it made an operating profit of £389.7 million last year, up 20.5 per cent.
This allowed John Lewis, recently voted Britain's favourite retailer, to pay a 15 per cent bonus to its 70,000 partners — equivalent to an extra eight weeks' pay and worth £2,161 a head on average.
Chairman Charlie Mayfield said the company's partnership model — the biggest of its kind in Britain — had strong appeal in an era of widespread distrust in big organisations.
He said: “We are in a situation now where people have lost confidence in organisations that they found have not been run in their best interests. There is a feeling in people's minds that there must be something different.
“People accept that we live in a world where not everyone is equal, but they do expect fairness. Our bonus is shared in a totally transparent way. It is a 15 per cent bonus for me and for the person who joined last week. That principle of fairness does have an appeal to it and is something perhaps other organisations could reflect on.”
The partnership system has been so successful even some councils have started to model themselves on it.
One City analyst said John Lewis and Waitrose remained a “haven of consistency and reliability”. He added: “Who would have thought that in the worst recession any of us have worked through, the most expensive supermarket would be the biggest winner. It's amazing.”
Group sales in the year to the end of January were up 6.5 per cent to £7.4 billion, and pre-tax profits rose by just under 10 per cent, at £306.6 million. Waitrose sales grew nine per cent to £4.5 billion and it attracted an extra 400,000 shoppers a week compared with a year ago. Sales at the department stores, which have as their slogan “Never knowingly undersold”, were up three per cent to £2.9 billion.
Mr Mayfield said Waitrose was still “under-represented” in London, where new outlets are planned for Cheam, Raynes Park and Stratford this year and next. There will also be new John Lewis stores at Stratford and Purley Way, Croydon.
But Mr Mayfield warned Britain would climb only slowly out of recession, with a full recovery taking “a number of years”. He added: “The economy is fragile. There is no question that last year the stimulus package helped ease the credit crisis, and low interest rates and reduced VAT put money in people's pockets.
“Some of that is going to be unwound this year. It is highly likely that households will feel the effects of higher taxes and probable cuts in public spending. We are not going to see a return to where we were for a long time.”
How staff benefit — from top job to shop floor
Alison Cook, deputy beauty department manager, John Lewis Oxford Street
Age: 46
Salary: Five figure salary
Bonus: 15% of salary. “Enough to pay for a family summer holiday.”
The mother of five has worked for John Lewis for 15 years and said she was delighted with the bonus after a “challenging” year. She said: ”It is enough money to make a difference, so that the little luxuries such as a family holiday do not go by the wayside. The bonus makes a realf difference to way you go about your job. It makes a difference to how we serve that extra customer.”
Charlie Mayfield, chairman of John Lewis Partnership
Age:43
Salary £740,000
Bonus: Around £110,000
The former army officer became only the fifth chairman of the history of John Lewis in 2007. He is the best paid partner at John Lewis, where no employee has ever earned more than £1 million, but his total package is a fraction of what he could earn working for a retailer of similar size quoted on the stock market.
Reader views (3)
Well done John Lewis! At a time when all the profits are shared between a tiny amount of people at the top, they're setting the perfect example to follow, rewarding everyone for their hard work. It's certainly giving a very positive image, and makes me want to shop there more often, knowing that staff are treated with respect.
- Londonfrog, London UK, 12/03/2010 11:47
Report abuse
Excellent stores, who will price match any item with another store, and offer 5 year guarantees on TV's and 2 years on all other electrical goods, oh and free delivery, so better than Curry's Comet etc.
It's a pleasure to shop at their stores.
- Daisy Willets, London SW1P, 12/03/2010 11:00
Report abuse
Does'nt this mean you are charging exorbitant prices for your goods ?
- Davey_Bouy, Chertsey, 11/03/2010 18:05
Report abuse
