Staff members at John Lewis and Waitrose will not get a bonus for the first time since 1953, after the group was hit by a multimillion-pound lockdown loss.
Dame Sharon White, chairwoman of The John Lewis Partnership has told partners that the announcement “will come as a blow” after it posted a £55m loss for the six months to July 25, after higher costs offset an increase in revenues.
She said: “The Partnership Board has now confirmed that there will not be a bonus next year given our profit outlook.
“I know this will come as a blow to partners who have worked so hard this year. The decision in no way detracts from the commitment and dedication that you have shown.
“The group found itself in a similar position in 1948 when the bonus was halted following the Second World War. We came through then to be even stronger than before and we will do so again.”
During the six months the firm announced the closure of eight John Lewis retail sites, which put 1,300 jobs at risk, as part of its turnaround efforts, including its travel hub shops at London Heathrow Airport and London St Pancras, four At Home shops in Croydon, Newbury, Swindon and Tamworth, and two full-size department stores in Birmingham and Watford.
The firm has also announced plans to shutter three Waitrose stores at Ipswich Corn Exchange, Caldicot and Shrewsbury, while selling Waitrose Wolverhampton to Tesco, a move which will result in 124 job losses but see 140 staff at the Wolverhampton store transfer to Tesco.
The half year figures posted this morning show online sales growth was strong at 73%, helping to offset the impact of shop closures, with overall sales down (10)% on last year.
Dame Sharon also said sales momentum is starting to build in reopened stores, with sales down around 30% on last year, ahead of expectations.
Stores in retail parks are down by around 15% and are doing better than city centres, especially London which is down around 40%.
It said home working has had a big impact on what people are buying, with more TVs and tablets, fewer trousers and trainers.
She said online now accounts for more than 60% of sales, from 40% before the pandemic, forcing the firm to reassess how much its shops contribute to whether our customers buy online or not, and that before the crisis shops contributed around £6 of every £10 spent online but now contribute around £3.
Early weeks of trading have been encouraging, the group said, adding that services previously only available in store, such as personal and home styling, beauty and nursery advice, have been performing well.
Meanwhile, it said demand for Waitrose has seen a strong pick-up since the end of its relationship with Ocado on September 1, with online orders coming in 9% higher in the first week.
Dame Sharon said: “The pandemic has brought forward changes in consumer shopping habits which might have taken five years into five months.
“Both brands entered the crisis with strong and established online businesses and in the case of Waitrose, plans for expansion well under way in preparation for the end of the relationship with Ocado.
“Our digital businesses have been key to underpinning our first half performance.