The boss of John Lewis and the supermarket chain Waitrose has said the UK is facing double-digit inflation as the war in Ukraine exacerbates the soaring cost of living, with prices rising in the supply chain and on shelves.
The prediction from Sharon White, chair of the John Lewis Partnership, comes with UK inflation ready at a 30-year high of 5.5%, and expected to rise to almost 8% in April, when household energy bills will soar by hundreds of pounds.
“We are seeing inflation we haven’t seen in 30 years,” said White, a Cambridge-educated economist and former second permanent secretary at the Treasury, speaking on the BBC’s Radio 4 Today programme. “Everything you can see in terms of energy prices from the impact of the Ukraine war suggests that we might well end up with double-digit inflation. My big worry is that it ends out being more enduring than anyone expects. So I think inflation is the big macroeconomic washout.”
She was also taken to task over John Lewis’s decision to pay all staff a 3% bonus, worth 1.5 weeks pay, after reporting a strong bounce-back in 2021, despite deciding not to repay £58m in tax relief it accepted from the government to weather the worst of the pandemic two years ago.
“We kept that relief, that exemption from tax, we used that exactly for the purposes intended, which was to secure jobs and to avoid further restructuring,” she said. “So I make no apologies for paying the bonus to partners who have worked their socks off over the last year.”
In 2020, for the first time in 67 years, John Lewis Partnership did not pay staff, which it terms partners, a bonus as the business was forced to close some stores after reporting a £517m loss.
“Do I think it was the right thing that we have been able to pay a bonus to partners on the back of results,” she said. “I feel very comfortable morally, absolutely it was the right decision,” White said.
She also said the organisation was continuing to look at its supply chain to see whether a ban on the sale of Russian goods in its stores, which it announced earlier this month, could be extended to other products or suppliers.
“We have removed Russian vodka from Waitrose shelves and Russian-made pallets that go into outdoor pizza ovens [sold] in John Lewis,” she said. “Anything that is made in Russia is off the shelves. And then, because supply chains are really complicated, we are looking at whether there are other products we need to take off the shelves as well.”
