The John Lewis Partnership confirmed that staff members will not receive a bonus for the first time since 1953 after the group suffered a huge drop in profits.
The owner of the eponymous department stores and the Waitrose supermarket chain said the closure of stores and shift in consumer habits since the coronavirus pandemic began had hit overall trading.
Operating profit at the department store fell by 46 per cent in the first-half of year. As a result, the employee-owned group will not pay its staff a bonus.
“The group found itself in a similar position in 1948 when the bonus was halted following the Second World War,” the company said in a statement. “We came through then to be even stronger than before and we will do so again.”
Chairwoman Dame Sharon White told staff on Thursday that the bonus announcement “will come as a blow” – but said the company would expect to pay out a bonus again once its profits exceed £150m.
The update comes a day after the group revealed plans to shut four of its Waitrose supermarket stores. In July, it also announced the closure of eight John Lewis stores, in a move which put 1,300 jobs at risk.
Dame Sharon said: “The pandemic has brought forward changes in consumer shopping habits which might have taken five years into five months.
“Both brands entered the crisis with strong and established online businesses and in the case of Waitrose, plans for expansion well under way in preparation for the end of the relationship with Ocado.”John Lewis store in London(PA)
The John Lewis Partnership said it posted a £55m loss for the six months to 25 July after higher costs offset an increase in revenues.
The group also said it plunged to a £635m pre-tax loss for the period after being impacted by a £470m write-down on its stores.
Online sales were “strong” with 73 per cent growth during the period, Dame Sharon said, and the company saw higher sales of “less profitable lines such as laptops and loo rolls”.
The worst-case scenario, set out by the group in April, for an annual fall in sales of 5 per cent in Waitrose and 35 per cent in John Lewis remained its view.
The company said the outlook for the second half of the year was “clearly uncertain” given the broader macroeconomy. “We now believe the most likely outcome will be a small loss or a small profit for the year.”