John Lewis says sales in the seven-week Christmas period were 1.4% higher than for the same period last year. However, that may not be enough to secure a bonus for its staff this year, the firm said.
Gross like-for-like sales, which strip out the impact of store opening and closures, at its Waitrose supermarkets, were £1.05bn, up 0.3% on last year.
The John Lewis department stores themselves saw sales of £1.1bn, up 1% on last year. It said that, although it had the money to pay staff a small bonus, it would have to “consider carefully” whether paying one would be prudent this year.
If the partnership decides not to, it would mark the first year since 1953 that staff had not had a profit share.
John Lewis’ structure is unique. It is owned by its staff, who are called partners. Typically in profitable years, they receive a share of these, which in good years can add the equivalent of several months’ worth of pay.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, outlined the challenges facing the retail sector: “Two main factors are affecting the retail sector – oversupply of physical space and relatively weak consumer demand.
“Despite this, we had a positive Christmas trading period, thanks to the extraordinary efforts of partners in our business.” He said full-year profits would be “substantially” lower this year.
He stressed that the business was in a position to pay a “modest” bonus, but that the board would need “to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time”.