John Lewis has announced a record investment in staff pay despite troubled finances as it looks to mitigate the cost-of-living crisis and retain staff, according to Retail Week.
The pay increase will be effective from April this year and will result in minimum pay going up around 10 per cent to £12.89 in London and £11.55 elsewhere in the UK.
The company is expected to confirm the pay rise when it announces its annual results next week.
The announcement follows a tough year for British workers, whose incomes have been squeezed by the cost-of-living crisis. Average food and energy prices have risen by around 20 per cent since mid-2020, according to the ONS.
Other companies have also recently announced staff pay increases to help workers deal with rising prices and retain staff. Tesco and M&S have promised investments of £300m and £89m respectively.
The news comes at a difficult time for John Lewis, which also owns supermarket Waitrose.
Last year, the retailer announced a six per cent fall in profit for the six months ended 29 July, after reporting its second-ever full-year loss of £234m in March 2023. It cited a spending cutback by customers.
At the end of January, the company announced 11,000 job cuts and halved redundancy pay for its staff in a bid to free up extra cash.
Boss Sharon White will exit her role next February after a five-year term as the company looks to turn its finances around.
She put a turnaround strategy in place during the pandemic, which aimed to boost John Lewis’ profits to £400m in five years. The strategy is now expected to complete in 2027/28.
City A.M. has approached John Lewis Partnership for comment.