A Fairer Share of Capitalism

I was delighted to reveal to my team in John Lewis Oxford Street that their hard work, and that of the other 84,700 Partners within the John Lewis Partnership, is being rewarded with an annual Partnership bonus of 17% of pay, equating to around 9 weeks’ pay.

This year’s £210.8m bonus pay-out is a reflection of continued success across the John Lewis Partnership. With a 27% increase on last year (£165.2m last year), following a 9.3% rise in sales to £9.5bn, it’s clear that consumers believe in the values of an employee owned business and value excellent service alongside high quality goods.

At Waitrose and John Lewis we understand that times are tight for our customers, and for our Partners. Indeed up and down the high street, well-known brands are struggling in challenging economic circumstances. We were encouraged by the acceleration in the rate of our sales growth during the year and especially the last trading quarter.  Which is why, as we continue to outperform competitors despite the gloomy economic climate, the question is often asked “what makes John Lewis different?”. The answer is both simple and complex. It is both our people and our ability to adapt quickly and step up innovation in new products with a focus on value and sustained and rapid growth online over the long term.

As the disconnect between big business and the public grows in the face of consumer trust fundamentally shaken by the recent banking crisis, customers are increasingly looking for products and services they can trust and which reflect their personal values. Our customers trust the Partnership’s products and services because they appreciate that the business model is fair and equitable, an environment in which people are able to develop and progress, and in which they permanently focus on exceeding customer expectations.

Our Chairman Charlie Mayfield explains “It is not easy to grow sales faster than the market, but we have done so in Waitrose and John Lewis faster than the market for the fourth consecutive year.  For this to happen we’ve needed what I’ve described as a quiet revolution which has been under way in our supply chain, IT and support services.  Without that we could not have delivered these results.  Alongside this good set of results I feel we are successfully adapting our business for a world that’s changing fundamentally, and doing so fast.  There’s always more to do and that’s what we have in some excellent plans for this year and beyond”.

Across the 39 John Lewis stores, 255 Waitrose supermarkets, 35 Waitrose convenience stores, and the related online offerings the business has annual gross sales of over £9.54bn – an increase of £811.8m or 9.3% on last year. With an operating profit of £452.4m this year, the Partnership is the UK’s largest example of worker co-ownership where all 84,700 staff are Partners in the business.

This year John Lewis will be investing significantly in store refurbishments, a new warehouse and future stores. Creating even more opportunities for the employee owners throughout the company to grow, thrive, develop and, crucially, be rewarded. My own shop on Oxford Street has a number of exciting developments to look forward to during the refurbishment of our lower ground floor later this year. The pace and quality of our innovation and initiatives has been extremely strong and is one of the central reasons for our continued high performance.

The Partnership is dependent on each and every Partner for our continued success. Sharing ownership across the workforce means more than just sharing profit, though. One of the reasons that we, and other employee owned businesses, deliver consistently strong performance is the high level of employee engagement. This is not an automatic consequence of sharing a financial stake in the business, but the result of creating a different workforce dynamic. Throughout the organisation Partners share the management and development of their businesses over the long term. That is the real secret of our success.