Staff at ethical retailer John Lewis Partnership will receive an annual bonus of 15% of their salary as the company announces growth in underlying profits.
The partnership is an employee-owned company, which includes department store John Lewis and supermarket Waitrose. The company is owned by a trust on behalf of employees, who get a say in how the company is run and a share of the profits.
According to a study from thinktank Tomorrow’s Company, diversity in business forms, such as employee ownership, could deliver sustainable economic growth in the UK. The report argues that a business’ purpose is more effective when it is underpinned and reinforced by the form of the business, something that appears to have benefitted John Lewis.
The John Lewis Partnership reported operating profits before restructuring costs of £240.5m for 2013, up 11% from the previous year. The company said its business model played a key role in the growth.
Charlie Mayfield, chairman of John Lewis Partnership, commented, “Our ownership by partners has played a key role in these results. There are fundamental changes taking place in retail, especially in customer attitudes towards value, convenience and personalisation.
“For several years we have been adapting our business to take advantage of these changes. That has required high levels of investment, organisation changes and new capabilities. The level of change has at times been challenging, but partners have understood and embraced the need for their business to continue to develop.”
The business added that the current year had started well, with sales up 5.5% in the first five weeks when compared to last year. It also noted that there were “encouraging signs” that the whole economy and consumer spending is improving.