Ukraine crisis and continuing energy cost increases lead to warning by former leading economist
Hot on the heels of the good news that John Lewis’ greeting card sales are up 117%, the retailer group’s boss Dame Sharon White has warned inflation could hit double digits following Russia’s invasion of Ukraine, and said she’s concerned it will be “more enduring than any of us expected”, as the cost of energy keeps rising.
In an interview with the BBC on Thursday, 17 March, Dame Sharon said: “We’re seeing inflation that we haven’t seen for 30 years. Everything you can see in terms of the impact on energy prices from the Ukraine war suggests that we might well end up in double-digit inflation.”
In the 12 months to January, prices rose by 5.5% on average, while the Bank Of England had also warned the previous week that inflation could hit 8% or higher soon.
As an economist Dame Sharon was the Treasury’s most senior civil servant before joining the retailer as John Lewis Partnership chairman, and she said the combination of rising inflation and a fall in the number of people in the workforce was “a real double crunch”.
The business has been doing its bit for Ukraine, with the generosity of customers and JLP partners plus matched contributions having raised more than £1.2million to date to provide food, first aid, medicine, shelter and warm clothing for those still in in the country and those who are fleeing for their lives.
It is also providing practical help to the Association Of Ukrainians In Great Britain by offering partner volunteers to support their work.
In the BBC interview, Dame Sharon also defended the partnership’s decision to keep the £58m in business rates relief received in the year to January, despite most of its stores staying open while also enjoying a boom in online orders during the pandemic.
It also reinstated a £46m bonus pot this month for its 80,000 staff off the back of group losses narrowing to £26m, significantly down from £517m a year earlier when the covid-crisis led to the business closing a total of 16 stores and recording its first annual loss since 1920 when John Spedan Lewis took the retailer founded by his father in 1864 and turned it into a partnership owned by its employees.
“I make no apologies for paying a bonus to partners who have worked their socks off over the last year,” Dame Sharon said, “I have to think about what is the right thing to do for the business and it’s a purpose-led business.
“Do I think it’s the right thing to have used business rates relief for the purpose it was intended by the Government – to protect jobs and to protect the business from further restructuring? Absolutely.
“Do I think it’s the right thing that we’ve been able to pay a bonus to partners on the back of results? I feel very comfortable morally – yes, absolutely it was the right decision.”
Top: Former leading economist Dame Sharon White now heads up the John Lewis Partnership