The chairwoman of the John Lewis Partnership has warned the business’ inflation was “hitting the top line” and staff may not receive their annual bonus this year in light of rising costs.
Waitrose chief Sharon White said during a speech at the Confederation of British Industry (CBI) Annual Conference on 21 November that mounting inflation was denting shoppers’ budgets and affecting the Partnership’s finances.
When asked if the JLP would be able to pay its more than 80,000 partners a bonus this year, White said it was “going to be tough”.
The staff bonus was paused in 2020 for the first time in 67 years because of the pandemic. Last year it was brought back, with employees receiving a 3% bonus – or the equivalent to 1.5 weeks’ pay.
However, the Partnership has seen earnings slump to a loss of £99m in the first half of the year due to the cost of living crisis and increasing inflation across its supply chain.
Waitrose alone posted a sales drop of 5% to £3.6bn in the six months to July as average basket value fell by 18%.
White warned there were further signs consumers were spending less as they dealt with rising living costs in the run-up to Christmas.
Read more: Waitrose needs to be brave and bold to stave off sales and profits decline
“This is the first Christmas for three years that people get to spend with family, friends and loved ones, and I think people will be really excited to have a proper Christmas,” she said.
“For us, inflation is hitting the top line. Customers are more thoughtful about what they are spending, and we are very conscious of our employees.
“But you can see all sorts of things going on with consumer spending,” she said, adding customers were being “much more thoughtful and intentional about how they are spending”.
“So we have the same number of customers, but they might be putting one or two fewer things in their basket.”
White also said customers were “phasing” the cost of Christmas by shopping earlier this year, and that many had already booked their Waitrose delivery slots.
Her comments come as the ONS has said October’s consumer prices index (CPI) inflation rate was 11.1%, with food and energy prices driving much of the growth.
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