(Alliance News) - The John Lewis Partnership has cautioned over potential job cuts as it told staff it will not hand out a bonus for only the second time since 1953 after a hefty loss.

Bosses at the retail firm said employees are likely to be affected by plans to cut costs more aggressively to help complete a turnaround of the group's financial performance.

Chair Sharon White told staff in a letter: "As we need to become more efficient and productive, that will have an impact on our number of partners.

"That's a massive regret to me personally."

It came as the group, which runs the department store chain and the Waitrose supermarket arm, recorded a GBP78 million loss before exceptional items for the year to January 28.

It represented a slump from a GBP181 million profit in the previous year, with John Lewis blaming "inflationary pressures".

JLP recorded a GBP234 million pretax loss once additional costs such as significant writedowns on retail properties were taken into account.

White also apologised to staff for the lack of a bonus payment after a "tough set of results".

Her letter said: "You've been exceptional in what has been another very tough year. Two years of pandemic and now a cost-of-living crisis.

"Inflation has had a big impact on the partnership and sent our costs soaring – up almost GBP180 million on last year.

"I am sorry that the loss means we won't be able to share a bonus this year or do as much as we would like on pay."

On Thursday, the retail group said it fell to loss after customers bought less, with sales declining by 2% to GBP12.25 billion for the year.

Waitrose sales declined by 3% to GBP7.3 billion, while John Lewis recorded 0.2% growth to GBP4.94 billion.

The partnership said on Thursday that it plans to triple its cost savings target from GBP300 million to around GBP900 million by January 2026.

It said the increased savings are likely to include an extra GBP236 million from further "simplification".

Previous simplification efforts included changes to its head office, which resulted in 1,500 jobs being cut by 2021.

JLP said it has come under significant pressure from rocketing inflation over the past year, reporting GBP179 million in extra operating costs as a result during the year.

The update came a day after the group appointed turnaround specialist Nish Kankiwala as its first chief executive, in a shake-up of the leadership structure.

source: PA

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