John Lewis has axed its staff bonus for a second time and signalled job cuts are in the pipeline, after what it described as a "very tough year".

The department store firm, which also owns Waitrose supermarkets, has reported £234million pre-tax losses.

John Lewis Partnership chair Dame Sharon White said Waitrose had attracted more customers, but they had spent less.

She said the losses meant bonuses could not be issued this year for only the second time since it began the scheme in 1953.

Dame Sharon suggested the firm may have to reduce staff numbers, or "partners" as they are known at the company.

"As we need to become more efficient and productive, that will have an impact on our number of partners," she said.

No numbers

When questioned about specific plans around job losses, Dame Sharon said: "There are no numbers."

But the firm said it faced a "more challenging environment" and was tripling its target to make savings from £300million to £900million by January 2026.

It said savings would be made through the sale of assets, such as its Berkshire golf club, and by improving productivity.

Meanwhile, the plan to move into the residential property market was "working really well" Dame Sharon said.

John Lewis said its long-term aim was for almost half (40%) of profits to come from outside of shops by 2030.

But Dame Sharon said soaring prices last year had "hit us like a hurricane" and that customers had "felt the pain".

Cheaper items

Despite Waitrose reporting more shoppers in the year to the end of January, customers spent less. It said the size of the average basket fell by 15% and people were buying cheaper items.

Consequently, full-year sales at Waitrose fell by 3% to £7.31billion.

"The big online growth of the pandemic years was partly reversed," said Dame Sharon, adding: "Shoppers shifted some of their grocery spending to the discounters."

Retail analyst Catherine Shuttleworth said shoppers were "cherry picking what they buy at Waitrose".

The decline in Waitrose sales was significant, according to Ms Shuttleworth.

She told the BBC:"Volumes are the life-blood of supermarket businesses - the more you sell, the better the prices you can offer to shoppers.

"One glimmer of hope is that shoppers are back in department stores with sales up 20% - the strategy to invest more in a reduced store network is clearly working especially at seasonal peaks particularly Christmas."

John Lewis closed its store in Aberdeen’s George Street in August 2021.

FTSE 100

The UK's top share index, the FTSE 100, was up 57 points at 7,467 shortly after opening this morning, following yesterday's 65-point gain.

Brent crude futures were 0.63% higher at $75.20 a barrel.

No FTSE 350 companies are due to report today.

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