The John Lewis Partnership has placed a hefty £108 million bet on its workforce, announcing a pay rise that significantly outpaces national minimum wage increases as the employee-owned retailer capitalises on a return to profitability.
From 1 April, shop floor partners across John Lewis department stores and Waitrose supermarkets will see their minimum hourly rate climb to £13.25 nationwide, with those within the M25 receiving £14.80. For a typical full-time employee, this 6.9 per cent increase means an annual rise of around £1,600.
This investment deliberately outstrips the government-mandated rise in the national minimum wage, which increases from £12.21 to £12.71 per hour for workers aged 21 and over from the same date.
Helen Webb, JLP’s chief people officer, said the move was about “putting more money into their pockets month-in, month-out,” and demonstrated a “sustained commitment to partner pay.” The retailer also confirmed rates for workers with enhanced skills or specialist roles will rise to £14.31 per hour nationally and £15.98 within London.
A Sustained Pay Push
This latest hike is part of a multi-year commitment. It follows a record £116 million investment in March 2024 that delivered an average 10 per cent wage increase, and JLP has already earmarked a further £114 million for 2025, taking its total pay commitment over two years to £230 million.
Of the 2025 investment, £88 million – 77 per cent of the total – is a voluntary increase above National Minimum Wage requirements. Next year’s rise will see shop partners receive a 7.4 per cent increase, with potential for an additional 2 per cent for exceptional contributions, lifting minimum rates to £12.40 outside London and £13.85 within the M25. Pay for enhanced roles will also rise further in 2025.
Over the past three years, the Partnership has invested a total of £295 million in partner pay, resulting in a 25 per cent increase in the standard hourly rate for shop partners since 2022.
Funding the Rise: Turnaround and Transformation
The substantial pay commitment is underpinned by a marked financial improvement. JLP reported a profit before tax of £56 million for the 2023/24 financial year, a dramatic reversal from a £234 million loss the previous year. Partnership sales reached £12.4 billion, a 1 per cent increase, though John Lewis department store sales were down 4 per cent to £4.8 billion. Waitrose has shown resilience, with sales up 2 per cent in the first half of the current financial year.
This return to profit is being channeled into a sweeping transformation programme, with £542 million earmarked for investment in 2024 alone – a 70 per cent increase – to upgrade stores, revamp the John Lewis website, enhance customer service and open new Waitrose shops.
Concurrently, efficiency drives are underway, with indications that up to 11,000 roles could be reduced over five years as part of cost-cutting measures across the supply chain and stores.
Bonuses Shelved Amid Strategic Shift
Despite the return to profitability, JLP has confirmed it will not pay an annual bonus to its partners for the third time in four years, having also shelved payouts in 2021, 2023 and 2024. The company has prioritized investing in base pay and its retail businesses over bonus payouts during this transformation phase. Historically, bonuses averaged 15 per cent of annual pay over a 20-year period.
An internal update last summer indicated staff could be in line for a bonus if the Partnership beats a £200 million profit target, with the annual results – expected next month – set to provide clarity.
The decision reflects the challenging recent past; in 2022/23, JLP reported a loss before tax and exceptional items of £77.6 million, with an overall loss before tax of £234.1 million, largely due to property write-downs amid what it called the “economic backdrop and inflationary pressures,” with costs soaring by nearly £180 million. Product supply challenges and a warehouse fire also hampered Waitrose availability during that period.
The Partner Model in Action
As a 100 per cent employee-owned business, JLP operates on the core principle that partners are co-owners, with profits reinvested into salaries and benefits under democratic principles that encourage inclusive decision-making.
Beyond base pay, the benefits package includes discounts of 25 per cent at John Lewis and 20 per cent at Waitrose, a pension scheme with up to 12 per cent employer contributions, life assurance, equal parenthood leave and wellbeing support.
Industry-Wide Wage Pressure
JLP’s move aligns with a broader trend of rising wages in the retail sector, driven by inflationary pressures and government policy. Competitors including Marks & Spencer, Tesco, Sainsbury’s, Lidl, Aldi, Costa Coffee, Currys, Asda and B&Q have all announced significant pay hikes. M&S is investing £89 million to raise its minimum hourly rate to at least £12, while Tesco is spending over £300 million to reach £12.02 per hour.
The UK has seen real wage growth for the first time in two years as inflation falls, though households remain under pressure from higher mortgage rates and debt, leaving many cash positions below 2021 levels.
The people agenda has been steered by chief people officer Helen Webb, appointed last year, with interim CPO Jo Rackham playing a key role. Jason Tarry chairs the Partnership.
