John Lewis, the well-known UK department store chain, has shown signs of recovery as it successfully reduces its losses. Despite recording a pre-tax loss of £26 million in 2021, this is a significant improvement compared to the £491 million loss reported in the previous year. Furthermore, the loss is £172 million lower than the profit made two years ago, indicating progress in the company’s financial performance.

One positive aspect for John Lewis is its profit before bonus, tax, and exceptional items (PBTBE). This figure experienced a rebound to £181 million in 2021, marking a 38% increase from the previous year and a substantial 159% improvement compared to two years ago. It’s worth noting that the PBTBE includes a restored bonus of 3% paid to the company’s Partners, who are the staff that own John Lewis.

In addition to these financial improvements, John Lewis has made a commitment to paying its employees the voluntary Real Living Wage across all its locations in the UK this year. The company has also announced a 2% pay rise for its staff. However, the chair of John Lewis, Sharon White, has cautioned about potential price increases in the future due to significant cost pressures.

Despite the potential impact of price hikes, John Lewis reported positive sales figures for 2021. Total Partnership sales, which include both John Lewis and Waitrose, amounted to £12.5 billion, marking a 1% increase from the previous year. Surprisingly, it was the John Lewis department stores that outperformed Waitrose in terms of sales. John Lewis achieved record-high sales of £4.9 billion, with an 8% increase in like-for-like sales compared to the previous year, or a 4% increase based on reported figures. When compared to two years ago, John Lewis saw a 10% increase in like-for-like sales and 2% on a reported basis.

Looking ahead, John Lewis acknowledges the uncertainty caused by global events and their potential impact on the economy, customers, partners, and society. Nevertheless, the company remains focused on its five-year transformation plan, which includes significant investments to facilitate growth and business transformation. The plan includes a £119 million investment in John Lewis shops, digital services, and distribution capabilities for the current year. Furthermore, John Lewis will commit £500 million to enhance quality, value, and customer loyalty, with an improved MyJL loyalty program set to launch later this year. Waitrose will also benefit from multimillion-pound investments in its stores, digital platforms, and distribution.

Through its efforts to reduce losses, increase sales, and invest in its transformation plan, John Lewis demonstrates its determination to recover and succeed amidst a challenging retail landscape. The company’s longstanding reputation for quality and value positions it well to overcome uncertainties and fulfill the evolving needs of its customers.

Useful Links:
1. John Lewis Partnership
2. Real Living Wage