Top UK retailer John Lewis announced some results last week – operating profits for John Lewis stores fell 31.2% to £32.4m and were down 28.9% to £96.3m for Waitrose, its top tier supermarket arm.
Pre-tax profits for the six months to July fell by 14.7% to £81.9m and are expected to remain under pressure. Like-for-like sales at John Lewis department stores rose 3.1% during the half year, but fell 1% at Waitrose supermarkets. John Lewis chairman Sir Charlie Mayfield told the BBC that market conditions were tough.
Scroll down the recent article from the BBC (see the BBC Business News link – click here ) We can see it reveals the size of another long-term and worsening problem. That of their pension scheme.
‘The City’ cares less about this but it’s a huge issue for the company and its colleagues (so called because the company is run as a kind of co-operative and owned by family and employees)
The deficit in the partnership’s pension fund also soared 54% to £1.45bn compared with the figure in January due to low bond yields. Not cheering news for the company’s 90,000 plus employees (sorry partners!)
The company is not alone, several large and highly visible UK companies are in a similar position.
The moral of the story is that whoever you work for, large or small, final salary or defined benefit – they simply cannot be relied upon because they are essentially only a promise and not guaranteed. Personal provision must be taken. Guaranteed pensions are promises not guarantees!