John Lewis mulls revival of staff bonus
What: John Lewis may reinstate employee bonus after four-year hiatus if GBP 200m pre-tax profit target is achieved by February 2026, following successful transformation efforts.
Why it is important: The move signals a significant milestone in retail recovery, as the company's improved financial performance enables it to consider reinstating traditional benefits while maintaining its recent investments in base pay and operational improvements.
John Lewis Partnership is considering the reinstatement of its historic staff bonus scheme for its 69,000 employees, contingent upon reaching a pre-tax profit target of GBP 200m for the year ending February 2026. This potential return to bonus payments, which were last distributed in the year to January 2022, marks a significant shift in the company's recent compensation strategy. The retailer's improved trading performance has positioned it favourably to achieve this target, with profit before tax and exceptional items having increased from GBP 42m to GBP 126m in the year to January 2025. The decision will ultimately rest with the partnership board, including non-executive and elected directors, who will evaluate the company's performance, particularly during the crucial Christmas trading period. This development follows a period of strategic transformation that has prioritised base pay improvements and operational investments, demonstrating the company's evolving approach to employee rewards and business sustainability.
IADS Notes: John Lewis's potential bonus reinstatement reflects a significant evolution in its transformation journey. As reported in March 2025, the company prioritised a GBP 114 million investment in base pay over bonuses despite tripled profits, demonstrating a focus on sustainable compensation structures. This approach gained support when, in May 2025, the company modernised its benefits structure to reflect contemporary workforce needs. The June 2025 employee campaign for bonus reinstatement highlighted the cultural significance of the scheme, leading to management's commitment to restore it "as soon as possible." This development follows successful strategic initiatives, including February 2025's GBP 800 million store renovation programme and the revival of the "Never Knowingly Undersold" pledge, showing how improved business performance can enable the return of traditional benefits while maintaining modern operational investments.
