Bumper John Lewis payout expected

Mar 9 2011

Employee-owned John Lewis Partnership is expected to defy high street gloom when it reveals an estimated bonus pot of £170 million.

The bumper payout - an increase from £151 million last year but still lower than the £181 million record in 2008 - will be shared between 70,000 staff at its department stores and supermarket Waitrose.

The bonus will be announced alongside its 2010 results, which are expected to reveal the partnership's profits rose 15% to about £350 million.

Each worker - from the weekend check-out assistant to chairman Charlie Mayfield - receives the same percentage of salary as a bonus and will be informed of the windfall as the results are published.

John Lewis department stores have outperformed rivals recently as its more affluent consumers were able to cope better during the recession, but weekly sales figures since the end of January have suggested customers are starting to spend more cautiously.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "It does appear that John Lewis sales have lost significant overall momentum in recent weeks, which is a worrying sign for consumer spending given that John Lewis has very much been an outperformer in the retail sector."

Staff at John Lewis and Waitrose stores are expected to be awarded bonuses equivalent to between 16% and 18% of their annual salaries. Last year, staff shared a bonus pot of £151.3 million, with payments worth 15% of salary.

John Lewis Partnership announced on Sunday that it is raising £50 million through a retail bond issue aimed at customers. It has raised finance through bond markets before, but the "partnership" bond is the first time that it has let its customers invest.

The bond will be available to 1.5 million cardholders and 70,000 staff, or "partners".

The five-year fixed rate bond will be offered to qualifying individuals to invest a lump sum of between £1,000 and £10,000, in multiples of £1,000. It has a fixed annual return of 4.5% in cash with a further 2% paid in John Lewis Partnership gift vouchers.