John Lewis Bring Back Bonus

 

John Lewis is awarding its staff a bonus for the first time in four years as the retailer continues its turnaround. The partnership, which operates the eponymous department store chain and Waitrose supermarkets, said underlying profits had grown during its last financial year. The 2% bonus, equivalent to an extra week's pay, will be the first its staff have received since 2022. It was scrapped during the Covid pandemic when the business underwent a major revamp which included shutting shops and cutting jobs. Looking ahead, John Lewis said it remained "cautious" for the current year but was in a stronger position financially "to navigate the challenging macroeconomic environment". The latest results show the business reported a pre-tax loss of £21m, due to £120m worth of one-off costs which mainly related to write-downs in the value of old tech systems. But underlying profits rose 6% to £134m. Sales across the business rose by 5% to £13.4bn. Sales growth was higher at Waitrose compared to John Lewis. Supermarket sales grew by 7% to £8.5bn in the year to the end of January compared to a 3% increase to £4.9bn at its department stores.

BBQ - Is a bonus the best way of motivating staff?

John Lewis Bonus

Tesco Wage Rise

Tesco will lift pay for its store staff by 5.2% but will scrap the extra pay for working on Sunday. The UK's biggest supermarket chain said the hourly rate will go up by 43p to £12.45 from 30 March after reaching a deal with unions. It will raise pay again to £12.64 from the end of August - a little above the UK national minimum wage which is set to rise to £12.21 per hour from April. However, Tesco will also drop the current 10% pay bonus for Sunday shifts for all staff, which it had already stopped providing for new starters. Tesco's UK chief executive says the £180m spent on funding the pay increases is a "significant investment". The move comes as many big supermarkets raise pay to attract more staff in a tight labour market. In January, Sainsbury's said it will raise hourly pay by 5%, also in two phases, but said it was cautious about recruiting new staff in 2025 due to rising costs "to help manage a particularly tough cost inflation environment". The German-owned discount chain Lidl will also raise pay, it announced in February, from £12.40 per hour to £12.75. Chancellor Rachel Reeves announced in the October Budget that in April, along with the national minimum wage, employer National Insurance contributions will also rise. Businesses have said the extra costs from these changes will mean higher prices, job cuts, and shop closures, though unions have criticised firms for saying this.

Tesco Wage Rise

No Bonus For John Lewis Staff

Retailer John Lewis has said its staff will not receive a bonus for the third year in a row, despite reporting a jump in annual profits. The employee-owned retail partnership, which also includes the Waitrose supermarket chain, said profits rose by 73% to £97m last year. However, it has not restored the staff bonus, saying it would invest in its business and workers' pay instead. Chairman Jason Tarry said he was "determined to pay a bonus as soon as we possibly can" but that "will depend on where we are at the time". A company source added that John Lewis had no specific thresholds or criteria for reinstating the bonus. The John Lewis Partnership employs about 69,000 people, and earlier this month it said shop workers would receive a 7.4% pay rise this year. But this is the fourth time in five years that John Lewis has not paid a bonus. The string of freezes started in 2020 - the first time it had scrapped them since 1953 - after it was hit by Covid lockdown store closures. John Lewis said that while it expected the economic environment to be "challenging for our customers and our business" in the year ahead, it was still confident it could push up profits. John Lewis has been trying to win back customers with a recovery plan after a tough few years that saw it cut jobs and close several stores.

BBQ - Would workers prefer a bonus or a pay rise? What is the best form of motivation?

John Lewis

Unilever Slashing Jobs

Unilever, one of the world’s largest consumer goods companies, has announced plans to cut a third of its office-based roles in Europe by the end of 2025. This decision comes after a global cost-cutting announcement in March, which will affect approximately 7,500 roles. About 3,200 jobs in Europe are expected to be axed as part of this plan. The company has begun a consultation process with those affected by the cuts. These changes are part of a broader effort to revive growth under CEO Hein Schumacher, who took over last year following a period of underperformance. Unilever also plans to split off its ice cream business, which includes brands like Wall’s, Ben & Jerry’s, and Magnum, as part of a strategy to “do fewer things better”. The company, which has major offices in London and Rotterdam, employs a total of 6,000 staff in the UK.

Blog Q - How will cutting a third of the workforce affect the morale at Unilever?

Unilever

Tesco Staff Shares Scheme

 

Over 20,000 Tesco employees are set to share a £30m windfall generated from the supermarket’s share schemes. An employee who invested an average of £68 per month over the past five years would receive around £6,640 from their £4,080 investment, yielding a profit of £2,560. The majority of the beneficiaries are shop floor or distribution centre workers.This payout is due to Tesco’s strong performance. The news comes after Tesco CEO Ken Murphy faced criticism for his £10m pay package last year. The company’s share schemes offer staff the chance to buy discounted shares in the company. Those who invested the maximum amount of £500 per month stand to make significant profits from the three-year and five-year schemes.

Blog Q: Discuss the impact of such a scheme on the company’s relationship with its employees.

Tesco Staff Shares