* 2013-14 underlying pretax profit 376.4, up 9.6 pct
* FY sales exceed 10 bln stg for first time
* Staff to get bonus of 15 pct of salary, down from 17 pct
* John Lewis MD targets 2014-15 sales growth of 6 pct
* Waitrose MD expects 2014-15 sales growth of 7-8 pct
By James Davey
LONDON, March 6 British retailer, John Lewis
Partnership , forecast an improving economic
backdrop as 2014 progresses after posting a 10 percent rise in
It said it would pay its staff - who are all partners - a
bonus equal to nearly eight weeks pay.
Data and surveys have shown an improving outlook for UK
consumer spending, which generates about two thirds of gross
domestic product, but retailers have been wary as inflation
continues to outpace wage rises.
Last month grocer Asda warned Britain's economic
recovery was fragile, with huge regional variations.
However, on Thursday Charlie Mayfield, chairman of
employee-owned John Lewis, which runs Britain's biggest
department store chain as well as upmarket grocer Waitrose,
struck a more upbeat tone.
"We feel more optimistic about the macro picture in the
economy, all the economic indicators are moving in the right
direction," he told reporters.
"We haven't seen that feeding through into a buoyant mood in
terms of consumption and consumer expenditure. But my view is
that that will improve as the year goes on," he said, pointing
to Britain's rising housing market and an expectation that pay
settlements will start to move ahead of inflation.
The 150-year-old group, whose worker co-ownership business
model has been lauded by Prime Minister David Cameron, made a
profit before tax, staff bonus and one off items of 376.4
million pounds ($630 million) in the year to Jan. 25, on record
sales of 10.2 billion pounds, up 6.6 percent.
John Lewis' 91,000 staff will be paid a bonus of 15 percent
of salary, totalling 202.5 million pounds.
That was lower than the previous year's 17 percent,
reflecting the increased costs of a 10-year plan to remove the
group's just over 1 billion pounds pension deficit.
While rivals, such as Marks & Spencer and Debenhams
have toiled, John Lewis has consistently bucked retail
gloom, winning market share over the last five years.
Its generally more affluent customers were less impacted by
the economic downturn and it has a bias to the more prosperous
south east of England. A big push online, improvements to
stores, products, service, promotions and marketing, have also
chimed with shoppers.
Analysts reckon John Lewis' partnership structure is helping
it to outperform rivals, acting as both a motivator for staff
and as a facilitator for long-range decision making.
The group, the only major British retailer to publish weekly
sales figures, said Waitrose's like-for-like sales, excluding
petrol, increased 3.7 percent in the first five weeks of the
2014-15 year, while John Lewis' like-for-like sales were up 5.3
Waitrose managing director Mark Price forecast sales growth
in 2014-15 of 7-8 percent, with like-for-like sales up 3.5
"Whatever happens we're determined to use our very strong
balance sheet to keep Waitrose competitive on price," Price said
in relation to recent announcements on price investment by Asda,
Tesco and The Co-op.
John Lewis manaing director Andy Street is targeting a sales
rise of about 6 percent this year.
"I'm pretty sure that would be another decisive
outperformance of the market," he said.