John Lewis partners £211m bonus as online sales surge

John Lewis.  Picture: Getty
John Lewis. Picture: Getty
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HIGH street chain John Lewis has boosted its staff bonus following a surge in online sales that put the partnership back on the path of rising profitability last year.

About 2,400 employees working for the group’s eponymous department stores and Waitrose supermarkets in Scotland will benefit from a bonus of 17 per cent of salary, which was driven by the company’s rapidly expanding online operation. processed sales of £960 million last year, an increase of 41 per cent on 2011. It now accounts for a quarter of total department store sales, with John Lewis managing director Andy Street predicting further growth.

“We think that is probably heading to around 40 per cent, but all that matters is that we are ahead of the curve in anticipating customer demand,” he said.

The employee-owned retailer posted a 16 per cent rise in profits to £410m, with £210.8m set aside for staff bonuses equivalent to nine weeks’ extra pay. Group sales were 9 per cent higher at £8.5 billion.

The latest bonus compares to 14 per cent the previous year, when the pay-out was cut for the first time since 2009. Profits for the same period fell by 4 per cent.

Despite the success of, the chain also opened four stores during the year. Nearly two-thirds of all transactions now involve customers visiting both shops and online channels, the group said.

There are no plans to add any further sites before the 2014 opening of outlets in Birmingham and York, with John Lewis instead concentrating upon a £32m refurbishment across four of its 39 shops.

None of the three Scottish stores is involved in that programme, though longer-term plans to overhaul the Glasgow department store are being discussed.

The group is also stepping up refurbishment across its 290-strong Waitrose chain, where online sales were up by 49 per cent, driven in part by the continuing roll-out of “click & collect” services.

The supermarket arm opened 19 additional branches during the year to 26 January, including its fifth Scottish store, in Stirling. A sixth is due to open, in Helensburgh, this autumn.

Waitrose managing director Mark Price said the group would expand further in Scotland, aided by the opening later this year of a new distribution centre in Lancashire to supply the northern store network.

Across the group, chairman Charlie Mayfield is predicting slower growth even though consumers are becoming accustomed to the continuing fragile economy.

“I do think customers are 
becoming used to that new model, and we are seeing some stability returning,” he said. “We see this as a time of opportunity in a market that is growing slowly.”

The group enjoyed a strong start to the new financial year, with gross sales up 10.5 per cent in the first five weeks.

The department stores posted particularly strong like-for-like sales growth of 13.7 per cent, while Waitrose sales were 6.4 per cent higher on the same period last year.