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| John Lewis scraps bonus for first time since 1953 | John Lewis scraps bonus for first time since 1953 |
| (30 minutes later) | |
| John Lewis has confirmed that staff will not receive a bonus for the first time since 1953 after it was hit by lockdown store closures. | John Lewis has confirmed that staff will not receive a bonus for the first time since 1953 after it was hit by lockdown store closures. |
| The retailer - which also owns Waitrose - posted a huge £635m pre-tax loss for the six months to 25 July after higher costs offset a 1% rise in sales. | The retailer - which also owns Waitrose - posted a huge £635m pre-tax loss for the six months to 25 July after higher costs offset a 1% rise in sales. |
| Its chairwoman told staff on Thursday the announcement "will come as a blow". | Its chairwoman told staff on Thursday the announcement "will come as a blow". |
| Even before Covid-19 hit, the chain had warned it might not pay the usual staff bonus as competition ate into profits. | Even before Covid-19 hit, the chain had warned it might not pay the usual staff bonus as competition ate into profits. |
| The group's first-half loss was £635m once exceptional items were taken into account, including a £470m write-down in the value of its stores. | The group's first-half loss was £635m once exceptional items were taken into account, including a £470m write-down in the value of its stores. |
| Excluding those one-off costs, the group's loss in those six months stood at £55m. | Excluding those one-off costs, the group's loss in those six months stood at £55m. |
| The last time that the chain, which operates as a partnership, decided not to pay a bonus to its staff was in the aftermath of World War Two. | The last time that the chain, which operates as a partnership, decided not to pay a bonus to its staff was in the aftermath of World War Two. |
| Chairwoman Dame Sharon White said: "We came through then to be even stronger and we will do so again." | Chairwoman Dame Sharon White said: "We came through then to be even stronger and we will do so again." |
| She added: "I know this will come as a blow to partners who have worked so hard this year. The decision in no way detracts from the commitment and dedication that you have shown." | She added: "I know this will come as a blow to partners who have worked so hard this year. The decision in no way detracts from the commitment and dedication that you have shown." |
| The payment of bonuses will only resume once annual profits rise to above £150m and debt falls, she said. | |
| The retailer said store closures during lockdown and customers buying less profitable items, such as toilet paper or laptops, had hit trade. | The retailer said store closures during lockdown and customers buying less profitable items, such as toilet paper or laptops, had hit trade. |
| It estimated that in its first half, John Lewis shops saw a £200m drop in sales, while the wider group saw additional coronavirus-related costs total about £50m. | It estimated that in its first half, John Lewis shops saw a £200m drop in sales, while the wider group saw additional coronavirus-related costs total about £50m. |
| But in a statement, it said that its Waitrose supermarkets had seen "a return to the weekly shop", with like-for-like sales up 10% year-on-year. | But in a statement, it said that its Waitrose supermarkets had seen "a return to the weekly shop", with like-for-like sales up 10% year-on-year. |
| Changing shopping habits | Changing shopping habits |
| Dame Sharon said the pandemic had brought forward changes in consumer shopping habits "which might have taken five years into five months". | Dame Sharon said the pandemic had brought forward changes in consumer shopping habits "which might have taken five years into five months". |
| At John Lewis stores, online sales surged by 73% in the six months to 25 July, "helping to offset the impact of shop closures". They now account for more than 60% of sales overall for the department store chain, up from 40% before the pandemic hit. | At John Lewis stores, online sales surged by 73% in the six months to 25 July, "helping to offset the impact of shop closures". They now account for more than 60% of sales overall for the department store chain, up from 40% before the pandemic hit. |
| The group added that a shift towards increased home working had affected people's purchases, with increased sales of tablets and TVs, while sales of trousers had declined. | The group added that a shift towards increased home working had affected people's purchases, with increased sales of tablets and TVs, while sales of trousers had declined. |
| The chain also said that Waitrose was now delivering about 170,000 weekly food orders - up from 60,000 pre-lockdown - and the demand had risen since its partnership with online grocer Ocado ended in August. | The chain also said that Waitrose was now delivering about 170,000 weekly food orders - up from 60,000 pre-lockdown - and the demand had risen since its partnership with online grocer Ocado ended in August. |
| Having struggled to manage competition from online rivals and slower consumer spending, the group has, however, recently announced plans to shut stores. | Having struggled to manage competition from online rivals and slower consumer spending, the group has, however, recently announced plans to shut stores. |
| In July, it said it would close eight John Lewis stores, in a move which put 1,300 jobs at risk. And this week it announced it would close four of its Waitrose supermarkets, with the loss of 124 jobs. | In July, it said it would close eight John Lewis stores, in a move which put 1,300 jobs at risk. And this week it announced it would close four of its Waitrose supermarkets, with the loss of 124 jobs. |
| It also recently scrapped its famous "never knowingly undersold" price pledge, which had been in place since 1925. The commitment never applied to sales from internet-only retailers, which have lower costs and often undercut the High Street on price. | |
| Looking ahead, Dame Sharon said that the outlook for the second half was "clearly uncertain", given the wider coronavirus crisis. | |
| She also emphasised that the Christmas trading period would be "particularly important to profits" for the group. | |
| On Thursday, John Lewis also confirmed that it had opened its Christmas shop early this year. Sales of Christmas trees and baubles were both "markedly" up on last year, it said. |