Retail giant the John Lewis Partnership has revealed a return to annual profit, but said it would not hand out a staff bonus once again.
The group – which owns the John Lewis department stores and Waitrose supermarket chain – reported pre-tax profits of £56 million for the year to January 27 against losses of £234 million in the previous year.
It said that after “careful consideration” it would not pay its workers an annual bonus for the second year running, but said it would increase overall pay for employees by a record £116 million this year.
This marks only the third time since 1953 that the group has not paid out an annual staff bonus.
The group said it cut costs by £88 million in the past financial year, with changes to staff hours and “simplified ways of working” across shops and central teams.
It said it would look to increase investment in 2024-25 by 70% to £542 million, which will focus on modernising technology, refreshing its shops and simplifying the group.
The group is reportedly mulling a 10% cut in its workforce, accounting for around 11,000 staff jobs, which would be axed over the next five years as part of aims to save £900 million by 2027-28.
The group said it expects to make a “continued improvement” in profit this year as it overhauls its strategy, including aims to open new Waitrose shops and refurbish 80 supermarkets, while adding around 80 new brands to the department store chain.
It said: “Given the significant changes in the economy since we announced our strategy in 2020, we have refreshed our plan.
“We’re simplifying our business and improving productivity to generate stronger performance, from which we will invest to modernise and energise our unique customer offer.”
Sharon White, chairman of the John Lewis Partnership, said: “We have made significant progress in the last year to return the business to profitability and delivered results that allow us to increase investment in our retail businesses; we expect profits to grow further this year.
“This shows our plan is working, while we know there’s much more to do.
“This year we will unashamedly focus on investing back into our retail businesses for our customers, including opening new Waitrose shops and continuing to modernise our brand offering in John Lewis, while prioritising pay for our Partners.”