John Lewis boss says high street being held back by Labour’s taxes

John Lewis Partnership (JLP) has declared that it will pay staff a bonus for the first time in four years after a turnaround in fortunes, despite being held back by Labour’s tax hikes.

The owner of the John Lewis department store chain and Waitrose supermarkets said it was now able to pay staff, known as partners, an award worth 2 per cent of their pay.

It is welcome news for staff after the struggling business pressed pause on bonuses in 2020 during the pandemic and has since only paid it once, in 2022.

The business was seen to have lost its way under former boss Sharon White, focusing on non-retail ventures such as a build-to-rent property division while rival Marks and Spencer poached shoppers.

Together, JLP chairman Jason Tarry and John Lewis managing director, Peter Ruis, have led a revival, including by investing in shops and bringing back its historic ‘Never Knowingly Undersold’ pledge.

It will invest £35million into the bonuses, which works out as an average of £507 for each of its 69,000 partners. The bonuses, to be paid at the end of this month, are tax-free up to £3,600.

But the 2 per cent rate is a far cry from a record 24 per cent, which was paid out in 1988.

Bosses cited obstacles including Labour’s tax raid on retail, which last year included a £40m rise in JLP’s employer National Insurance contributions and £13m in new packaging levies.

Tarry said: ‘Despite a subdued market, a challenging lead into the crucial peak period and increased taxes, we took the decision to continue investing in the business, and have delivered cash and profit growth.’

Andy Mounsey, chief financial officer, also cited Labour’s later November Budget, which fell in the Black Friday week, as creating ‘subdued confidence towards the all important peak [Christmas] period for us.’

The partnership saw sales rise 5 per cent to £13.4billion for the year to 31 January 2026 while its profit before tax, bonus and exceptional items increased by 6 per cent to £134m.

But it booked a loss of £21million after a write-down related to a technology modernisation scheme was factored in, compared to a £97million profit last year.

Sales at John Lewis rose 3 per cent to £4.9billion, helped by shoppers splashing out on products such as coffee machines, which saw their biggest ever year.

The department store has launched 200 ‘new and in-demand brands’, it said, including a partnership with Topshop, to woo customers, as well as opening new cafes in its 36 shops.

And sales at Waitrose rose 7 per cent to £8.5billion, with the supermarket hailing refurbishments at 23 shops for helping improve customer satisfaction and win back shoppers. It said premium ranges such as its Duchy Organics line did well while frozen pastries were also best sellers.

The partnership admitted it was ‘cautious’ in its outlook for trading in the current financial year.

John Lewis managing director Peter Ruis, said that ‘people’s budgets are challenged’.

It comes amid fresh fears over the impact of war in the Middle East on consumer sentiment in Britain and heightened uncertainty about energy bills.