The John Lewis Partnership has reinstated its annual staff bonus for the first time in four years, awarding employees a 2 per cent payout following a modest improvement in sales and underlying profits. The move affects around 70,000 employee-owners, known internally as partners, and signals a cautious step toward restoring one of the retailer’s most distinctive traditions.
The employee-owned group, which operates 36 John Lewis department stores and roughly 320 Waitrose supermarkets, reported profit before tax and exceptional items of £134 million for the year ending January 2026, up from £126 million the previous year. Statutory results, however, showed a loss before tax of £21 million, largely driven by one-off costs including the write-down of legacy technology systems. Despite this, management said underlying performance was strong enough to justify the bonus.
Group sales rose 5 per cent to £13.4 billion. Waitrose led the growth with a 7 per cent increase in sales to £8.5 billion, supported by a 3 per cent rise in volumes as more shoppers visited its stores. John Lewis department stores reported 3 per cent sales growth to £4.9 billion, reflecting efforts to stabilise in a highly competitive market increasingly influenced by online platforms, discount retailers, and fast-fashion brands.
The partnership noted that profits were constrained by £53 million of cost pressures, including higher employer national insurance contributions, the introduction of the extended producer responsibility levy, and cautious consumer spending over the Christmas period.
The bonus reinstatement carries symbolic importance after the annual payout was suspended in 2020 due to pandemic-related store closures, marking the first suspension since 1953. The payment briefly returned in 2022 at 3 per cent but was later cancelled as the retailer faced losses and a major restructuring programme. Historically, bonuses were significantly higher, reaching up to 24 per cent of annual salary in the late 1980s.
Chairman Jason Tarry, who took over from Tesco UK in September 2024, has focused on a “retail-first strategy” to reverse years of declining profits and strategic missteps. Under his leadership, the partnership abandoned plans for build-to-rent housing developments and committed £800 million to modernise stores, enhance customer experience, and strengthen digital operations.
“Our multi-year plan to invest in customers and our brands for the long term is working,” Tarry said. “We have grown customer numbers and achieved record satisfaction. We remain on track to make further progress this year.”
While executives welcomed the return of the bonus, they cautioned that the retail sector continues to face subdued conditions, including weak consumer confidence, rising operating costs, and intense competition. The partnership remains committed to its transformation plan, aiming to restore profitability, strengthen brand loyalty, and unlock growth opportunities across both Waitrose and John Lewis.
For the wider industry, the bonus reinstatement highlights the resilience of the employee-owned model and underscores the importance of profit-sharing as a cornerstone of staff engagement in British retail.
