Retail organisation John Lewis Partnership is awarding a 2% bonus to its 83,000 employees, as a result of its 2019/2020 profits.
The payout, which is due to the organisation’s profit-sharing scheme and was announced to employees today (5 March 2020), paid employees 3% of their salaries in 2018/19; the dip this year this year is due to a 23% decline in profits.
Prior to last year, John Lewis’ profit-sharing bonuses have not dropped below 5% since the 1953/54 financial year, when employees received 4% of salaries. In the last decade, bonus amounts peaked in 2010/11 and 2012/13, reaching 18% and 17%, respectively.
In January 2020, the organisation announced that it will be considering whether to continue with its profit sharing bonus scheme in the future.
Sharon White, partner and chairman at John Lewis Partnership, said in an open letter to staff: “Profits in 2019/20 were at the lower end of what we had forecast. We are, therefore, awarding a bonus this year of 2%. I believe this is prudent and affordable and it recognises the contribution made by [employees] working in the business today without creating risk for our future sustainability.
“All of us are aware of the challenges in retail. New technology means that shoppers have never had so much choice, value and convenience. That is to be celebrated. And there is great opportunity for retailers who have an intimate understanding of their customers to respond to them in an agile fashion.
“Every [employee] can make a difference this year by focusing relentlessly on service, wherever they are in the business. If we get it right, customers will return to shop with us and we’ll earn their lifelong loyalty.”
Sir Charlie Mayfield, chairman at John Lewis Partnership, said: “The partnership board will meet in February to decide whether it is prudent to pay a partnership bonus. The decision will be influenced by our level of profitability, planned investment and maintaining the strength of our balance sheet.”