John Lewis has restored his employee bonus after sales at his department stores recovered in 2021.
The retailer had to slash payouts last year for the first time since 1953 after the pandemic hit its stores and caused heavy losses.
Department store sales hit a record £4.9 billion, while Waitrose supermarket sales rose 1% to £7.54 billion.
The company also said that losses were down sharply from a year earlier.
Losses for the year to 29 January shrank to £26m from £517m in the comparable 12 months.
Dame Sharon White, chief executive of John Lewis Partnership, said the group was off to a “great start” on a tough five-year restructuring plan, but added it was “only a year over”.
Even before the pandemic, the retailer was badly hit by the shift to online shopping, announcing store closures and the shedding of nearly 2,500 jobs last year.
Dame Sharon said: “Looking ahead, we see continued uncertainty from global events impacting the economic environment, our customers, partners and society. With rising inflation and rising energy prices, our customers are facing higher living costs.
“While this creates uncertainty regarding the future, we remain focused on investing significantly in our partnership plan to transform and grow our business.”
The employee-run company said it would pay its employees a 3% bonus, equivalent to a week and a half’s wages, and increase wages by 2%. This is on top of a promise to pay the real living wage.
The last time John Lewis did not pay a bonus was after World War II.
Withdrawals were suspended last year after posting a huge pre-tax loss of £635m in the six months to July 25, mostly caused by store closures.
Since then, the group has been trying to bolster its business by investing more in John Lewis stores and online shopping, while cutting costs elsewhere.
In July, it announced plans to cut 1,000 jobs, after previously announcing it would cut around 1,465.
The group, which also owns the Waitrose supermarket chain, recently said it was abandoning its “Never Knowingly Undersold” promise to customers, which began in 1925.
The promise means the retailer will price-match branded products with national retailers, but not online-only sales. However, John Lewis said it is becoming less relevant as shopping increasingly moves online.
The group has also said it will remove all Russian-made Waitrose and John Lewis products in response to the conflict in Ukraine.
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