The John Lewis Partnership has restored its staff bonus after narrowing losses to £26m last year. The department store group, which is staff-owned and also operates Waitrose supermarkets, said it would pay a 3% bonus to workers, equivalent to 1.5 weeks pay. The group’s executive team, led by Sharon White, the chairman, said they would donate their bonus to the British Red Cross in the light of the war in Ukraine. The group also said it would pay all partners at least the independently verified living wage of £9.90 across the UK, a 2% pay rise. The company said it was investing £54m in additional pay excluding the bonus. A year ago it said it would not be paying a bonus to staff, known as partners, as they jointly own the company via a trust, for the first time in 67 years and was unlikely to pay a bonus this year after slumping to a £517m loss for 2020. White said on Thursday: “With our partners, like the whole country, facing a cost-of-living squeeze, we believe that this is the right time to pay the voluntary real living wage, nationwide.” She said the group would be “increasingly thinking about the value proposition” for customers given the cost-of-living crunch, including increasing its cut-price Anyday range at John Lewis. But she warned the situation in Ukraine meant that inflation in costs was likely to be “more persistent and at a higher level” than previously expected, affecting John Lewis and Waitrose. The company said it did not plan more job cuts or store closures in the year ahead but would be aiming to become more efficient with technology to reduce the cost of handling products and to reduce waste. The improved deal for workers came after John Lewis said total sales for the group rose 1% to £12.5bn in 2021. Losses narrowed to £26m from £517m after £161m of exceptional items largely related to closing eight department stores. Bérangère Michel, the finance director, said profits had been boosted as the partnership had made £170m of cost savings during the year, including job cuts, and some of the financial benefits from those action would continue to filter through in the year ahead. Department store sales increased 4% to £4.9bn, the highest level ever, despite 10 weeks of closures during pandemic lockdowns and the permanent closure of eight stores. Online purchases accounted for just over two-thirds of sales, up from 42% before the pandemic. The department store’s profits rose 37% to £758m after the closure of eight unprofitable stores during the year. Pippa Wicks, the boss of the John Lewis department stores, said she expected supply chain issues to continue for up to two more years but the group’s profit margins had been aided by selling more fashion and homewares, and less technology. Sales at established Waitrose stores rose 1%, helping lift the total to £7.5bn for the grocery chain, but its operating profit sank 11% to just over £1bn as it struggled with supply chain issues, extra staffing costs during the pandemic and the shift to online.