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John Lewis Partnership plc Annual Report and Accounts 2015 2 3


PRINCIPLE 3 PROFIT


USING OUR PROFITS TO GROW SUSTAINABLY


Principle 3 of our Constitution expresses our view on profits generated by the business: “The Partnership aims to make sufficient profit from its trading operations to sustain its commercial vitality, to finance its continued development, to distribute a share of those profits each year to its members, and to enable it to undertake other activities consistent with its ultimate purpose.”


Our principle in action


Our Partnership Board considers Principle 3 when deciding how to balance rewarding Partners with investing back into the business.


Each year, the business rewards Partners with a bonus from profits generated by the Divisions. This is a percentage of ranking pay, which is the same for all Partners regardless of level or length of service. This would be similar to a dividend given to shareholders in a conventional company. Profits are also used to fund our pension scheme and pay down debt on funding borrowed by the Partnership.


Importantly, the Partnership also reinvests back in our business to allow it to grow sustainably.


Investing in new technology


One example of how we are investing back into the business is in the capital investment we have made in Waitrose’s QuickCheck technology. This allows customers to scan and pack their shopping as they move about the shop. Customers check out at specially designated tills where they simply need to end their shop on the hand-held scanners and pay.


Investment in QuickCheck makes sense. It gives shoppers a more convenient experience. It means that Partners on tills can be redeployed to interact with customers in other ways. And we now know that customers using QuickCheck are more loyal.


INVESTING IN QUICKCHECK HAS BEEN REALLY WORTHWHILE. WITH CUSTOMERS, I FOCUSSED ON THE BENEFITS QUICKCHECK OFFERS. FOR EXAMPLE, GETTING SHOPPING DONE FASTER, AND MANAGING SHOPPING BUDGETS MORE EASILY. CUSTOMERS REALLY RESPONDED TO


THESE ASPECTS OF THE SERVICE. Jonathan Hall Customer Services, Waitrose Cambridge


This year we distributed 48% of profits to our Partners. The remainder was retained for investing in the pension scheme, repaying debt or reinvesting in the business.


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