The John Lewis Partnership fell to another big loss of £59 million for the half-year as Dame Sharon White admitted her “transformation” plan will take two years longer to execute than previously claimed.
That seems highly likely to take a toll on the staff annual bonus at least this year and probably next, though the group insists no decision has yet been taken.
The employee-owned business blamed inflation and the need for greater investment for pushing back its goals.
“The cost-of-living crunch means the plan will take longer,” said White, brought in as chairman to revolutionise a company critics say has fallen behind the times.
The annual bonus to partners fell to zero in March this year after a full year loss of £230 million. White said then that “inflation hit us like a hurricane” as JLP plunged to only its second ever full year loss in its near 160-year history.
The modernisation plan will now take until 2027/28 rather than 2025/26 to complete and those investments will “take precedence” over payouts to staff.
The move not to pay a staff bonus this year was only the second time that has happened since 1953..
White spoke of a “productivity deficit” and “the most competitive retail market ever” as she warned of a “long road ahead”.
The loss of £59 million is down from £99 million a year ago. The group hopes to be profitable for the entire year and notes it makes most of its money in the last three months of the year.
JLP insists its brands are strong – it claims 600,000 new customers to 21.4 million.
Waitrose sales rose 4% to £3.7 billion. A slow down in dining out has helped those sales as has a new £5 lunchtime meal deal.
John Lewis sales fell 2% to £2.1 billion as sales of “big ticket” items such as computers fell, while fashion and beauty are up.
It has been “more loafers and fewer sofas”, said JLP.
White said: “While change is never easy - and there is a long road ahead - there are reasons for optimism. Performance is improving. More customers are shopping with us. Trust in the brands and support for the Partnership model remain high.”
JLP is offering free coffee to policemen who come into the stores in a bid to deal with shoplifting epidemic that seems to have hit all retailers. It said “shrinkage” – mostly theft – is up by £12 million year on year.
Chief executive Nish Kankiwala, appointed in March, said modernisation efforts are “well under way”.
In May White won a confidence vote from the partnership council, a group of 60 employees, though the exact number of votes in her favour was not disclosed.
There has been speculation White could demutualise – end the group’s partnership model. She has denied this, though it remains possible that she raises funds from outside the group.
