John Lewis, the popular British department store chain, has announced its financial results for the year 2021. While the company reported a loss on a pre-tax basis, there were also several positive trends worth noting.
One positive development is the restoration of a 3% bonus for John Lewis Partners, who are the staff that own the business. This is great news for employees who have worked hard to contribute to the company’s success. Additionally, the company’s profit before bonus, tax, and exceptional items (PBTBE) showed a significant improvement compared to the previous year. PBTBE reached £181 million, representing a £50 million increase or a 38% growth. Moreover, it was an impressive £111 million higher than two years ago.
Although there was a pre-tax loss of £26 million, it is worth mentioning that this is a significant improvement from the previous year. Further, the loss was also much lower (£172 million) compared to the profit generated two years ago. These figures highlight the challenges and obstacles that John Lewis has faced in recent years but also demonstrate its resilience and ability to bounce back.
In addition to the restoration of bonuses, John Lewis has committed to paying its staff the voluntary Real Living Wage across the entire company. This move demonstrates the company’s dedication to fair compensation and supporting its employees. Furthermore, the company has announced a 2% pay rise for its staff, which is another positive development for its workforce.
Sharon White, the chair of John Lewis, has mentioned possible price increases in the future due to significant cost pressures. It is essential to note this potential change, which could impact customers who rely on the company for their shopping needs.
Despite the uncertain future surrounding pricing, John Lewis has reported positive sales for 2021. The company’s total Partnership sales reached £12.5 billion, showing a 1% increase compared to the previous year. Notably, it was the John Lewis department stores that outperformed the Waitrose supermarkets in terms of sales, which is a reversal of previous trends. The John Lewis operation achieved its highest sales in history, totaling £4.9 billion. This represents an 8% increase compared to the previous year on a like-for-like basis, or a 4% increase on a reported basis. When compared to two years ago, the sales for John Lewis were up 10% like-for-like and 2% reported.
Despite the challenges posed by global events and rising costs of living, John Lewis remains committed to investing in its Partnership Plan, which aims to transform and grow the business. This year, the company plans to invest £119 million in its shops, digital services, and distribution capabilities. Additionally, it will allocate £500 million to improve the quality, value, and loyalty benefits for its customers. To this end, an enhanced MyJL loyalty scheme will be unveiled later in the year. Waitrose, the supermarket arm of John Lewis, will also receive significant investments to improve its stores, digital platforms, and distribution.
Overall, John Lewis is pleased with its performance, considering it a positive start to its five-year transformation plan. However, the company acknowledges that the economic environment is uncertain, and challenges persist. Nonetheless, John Lewis is committed to adapting and investing strategically to ensure growth and success in the future.
Useful links:
1. John Lewis Website
2. John Lewis Partnership Website
