Why is John Lewis fixing its belt The Guardian

“The John Lewis partnership is cutting its a
ual bonus for staff. The group, which owns dozens of department stores and the Waitrose supermarket chain, has also been cutting jobs and reining in expansion.
The cost savings come despite a 21.2% rise in pre-tax profits to u00a3370.4m, before the staff bonus and one-off items, while sales rose 3.2% to u00a311.4bn.
So why is John Lewis reducing payouts to its workers, known as u201cpartnersu201d as they jointly own the business?
Pay rises
The introduction of the new minimum wage for over 25s u2013 u201cthe national living wageu201d u2013 has increased costs for all retailers. John Lewis has always tried to attract better quality staff, and retain them for longer, by offering pay above the legal minimum alongside other benefits ranging from a decent pension to the use of company holiday homes.
Maintaining that differential, and ensuring even better pay for staff who have been in place longer or have taken on additional responsibilities, cost the company u00a336m. Simply complying with the national living wage would have cost it only u00a33m. On average, non-management staff pay rose 5% to u00a38.67 per hour last year. As a result, those staff members still saw an overall increase in the combined value of their pay and bonus for the year..
John Lewis said pay would be going up again in April when the national living wage increases to u00a37.50 an hour from u00a37.20.”

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