John Lewis hints more job cuts to come despite profit rise

John Lewis has indicated it could cut jobs further, despite the retailer reporting a return to profit.

The retail partnership, which also owns the Waitrose supermarket chain, posted pre-tax profits of £56m compared with a £234m loss the year before.

However, it is not paying a staff bonus for the second year in a row.

The retailer said a "few hundred" roles were shed in 2023 as part of £88m in savings and it was eyeing similar cost cuts this year.

John Lewis's new chief executive, Nish Kankiwala, told the PA news agency: "We're looking at all the opportunities as we improve our ways of working and if there is eventually a reduction in roles, then we'll use (staff) attrition in the same way as we have done in the past.

"If there are unfortunately, regrettably, redundancies then we'll talk to our partners first."

John Lewis chair Dame Sharon White told journalists that while job losses at the partnership are inevitable in the coming years, there was no target for a reduction in jobs.

In January, John Lewis said it was planning further cuts to its workforce over the next five years in order to boost profitability.

The lack of bonus for staff is only the third time the retailer has not paid out such an award since 1953.

John Lewis said that is was focusing on improving pay overall for its employees, with about 45,000 staff set to get a 10% pay rise in April.

The partnership said that a million more customers shopped in its stores last year, spending £12.4bn - up 1% on last year.

Sales at Waitrose rose by 5% to £7.7bn, with a record number of customers choosing to shop at supermarket chain, it said.

However, spending in its John Lewis stores was down 4% to £4.8bn.

Sales of fashion and beauty products did well, but it saw weaker sales in home and technology.

Plans to refurbish 80 Waitrose supermarkets and open a string of new branches would allow for "continued improvement" in profit this year, the group said.

But Dame Sharon said suggestions John Lewis and Waitrose should split would not be good for the business. She told BBC's Today programme the results showed their plan was working.

"We've got so many customers who shop across the two, love both, and the fact that we're back to profit, the fact that customer numbers are growing, our debts are down, we've got the balance sheet and the firepower now to invest, you know, record levels over the next year."

She said the turnaround was "a great testament to the fact that we are stronger together".

The results come after a turbulent year for the company.

In October, Dame Sharon said she would be stepping down from her position at the end of her five-year term in 2025. Her tenure as chair is the shortest in John Lewis's near 100-year long history.

Earlier in the year, reports suggested that the partnership was considering selling off a minority stake in the business, meaning it would no longer be fully-owned by its employees.

Dame Sharon later ruled out the move, but said the board could consider external investment in future if it was needed.