John Lewis boss warns of ‘permanent inflation’ Business

The John Lewis boss has warned he faces ‘permanent’ inflation following Russia’s invasion of Ukraine as he reinstates his staff bonuses and raises wages as the cost of life increased.

Dame Sharon White, chairman of John Lewis Partnership, which also owns Waitrose, said the conflict in Ukraine meant inflation would also be “more persistent” and at a higher rate than expected.

Both Waitrose and John Lewis have been forced to raise prices for some items in recent weeks, with the supermarket chain’s prices rising 3-4% from 2% last year.

Dame Sharon said: “We expect inflation to be more permanent, more persistent and certainly at a higher level than when we all came together for the half-year results. [in September].

“There is a lot of uncertainty. It is clear that with the situation in Ukraine, the human tragedy above all else, is building more inflation in a more permanent and systemic way.

James Bailey, who runs Waitrose, said 2021 has been a “difficult” year for the grocer, marred by supply chain issues, lockdowns and rising costs.

He said: “Inflation is gradually increasing, we are trying to be very careful about which products we are going to raise the price of.”

It came as John Lewis Partnership said staff would share a £46m bonus pot this year, with each receiving a 3pc prize, equivalent to a week and a half’s wages.

John Lewis is employee-owned, which means that workers – otherwise known as partners – share a portion of the company’s profits.

John Lewis also said he would raise wages by 2% in addition to a commitment to pay the real living wage following complaints of “poverty wages” from workers.

It marks the return of annual payments after John Lewis was forced to cut his bonus in 2020 for the first time since 1953.

Staff have denounced the suspension of the bonus, while some employees have complained that they have been paid less than the actual living wage of £9.50 an hour, or £10.85 in London, and have had financial difficulties as a result.

Dame Sharon added that the cost of living crisis was affecting staff and that she was “pleased” to be able to make these changes.

She said: ‘It’s very important because we all face higher gas bills, higher gas bills all.

Finance chief Bérangère Michel said the mutual intended to pay a real living wage “for many years to come”, but was not becoming a real approved employer, which would commit it to do it.

She said: “We want to stay in control of our destiny.”

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This notice was published: 2022-03-10 16:16:58

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