Prepare for double-digit inflation, John Lewis boss warns Business

Inflation could hit double digits after Russia invades Ukraine, boss John Lewis has said.

Dame Sharon White said her big worry was that inflation would remain “longer than any of us expected” as the cost of energy continues to rise.

“We are seeing inflation that we haven’t seen in 30 years,” she told the BBC. “Everything you can see in terms of the impact on energy prices from the war in Ukraine suggests that we may well be in for double-digit inflation.”

In the 12 months to January, prices rose 5.5% on average, while the Bank of England warned on Thursday that inflation could reach 8% or more in the coming months.

Dame Sharon, an economist who was the Treasury’s top civil servant before joining the employee-owned retailer, said the combination of rising inflation and falling numbers of people in the labor force was “a real double crisis”.

She spearheaded a turnaround for the mutual, which also owns Waitrose as well as the department store chain.

Dame Sharon has defended the partnership’s decision to keep millions of dollars in trade fare relief despite most of its stores remaining open and a boom in online ordering during the pandemic – and reinstating a £46m bonus pot this month for its 80,000 employees. John Lewis received £58million in rate relief in the year to January.

“I make no apologies for paying a premium to partners who have worked hard over the past year,” she said.

“I have to think about what’s the right thing to do for the business and it’s a purpose-driven business. Do I think it was the right thing to have used the business rate relief for the government’s intended purpose – to protect jobs and to shield the company from further restructuring? Absoutely.

“Do I think it’s a good thing that we were able to pay partners a bonus based on results? I feel very comfortable morally – yes, absolutely it was the right decision.

The group’s losses narrowed to £26m, down from £517m a year earlier when the pandemic resulted in its first annual loss.