John Lewis Set to Reinstate Iconic Staff Bonus After Retail Turnaround

John Lewis is preparing to reinstate its celebrated staff bonus for the first time in four years, following a notable upturn in financial performance. The renowned mutual retailer, which counts 69000 employees across its operations, is now considering a bonus payout after internal figures showed a sharp improvement in trading at flagship stores.

According to documents reviewed by senior management, the John Lewis board will soon face a recommendation to restore the staff bonus if the group meets or surpasses pre-tax profits of £200 million for the year ending February 2026. This renewed optimism comes after last year’s profits of £126 million, a significant increase from the £42 million declared the year prior. Momentum appears to be gathering, with sales in the first half of 2025 expected to have increased, positioning the business favourably to reach its financial target.

Sources close to the board suggested that performance projections are robust, with the key message that continued focus and delivery on strategic plans remain essential for success. Should this bonus return be confirmed, it would represent an early success for Jason Tarry, who took over as chairman last September. Mr Tarry, the former UK chief of Tesco, has been credited with redirecting John Lewis back to its retail roots after previous forays into financial services and property.

The bonus, a historic feature since 1953, was first cancelled in 2020 in response to economic challenges, with a brief revival in 2022 before being discontinued again amid tougher trading. While profits multiplied last year, leadership opted to prioritise higher base pay for staff as well as investments into the business rather than a discretionary bonus, a move that sparked debate and led to an employee petition advocating for the payout’s return.

Many staff argued that the bonus stood for more than just remuneration, representing the recognition and appreciation of their efforts by the partnership. John Lewis has battled significant hurdles in recent years, including the impact of the pandemic and a shift in shopping habits away from bricks and mortar to online, pressures that were compounded by a record £648 million loss in 2021 after asset write-downs and restructuring.

The business has since embarked on a rigorous five-year cost reduction initiative, raising minimum pay and focusing on restoring profitability. Last year the partnership paid a record £116 million in salaries and increased its minimum hourly rate to £11.55. Eyes are now firmly on sustained trading performance as the deciding factor for bonus reinstatement, with internal communications reiterating a strong outlook for the coming year.