The John Lewis Partnership has cut its staff bonus to the lowest level in 64 years after annual profits plunged at the group, which owns Waitrose and a chain of department stores.
The company said 85,000 staff, known as partners because they jointly own the business, would receive a bonus equivalent to 5% of annual pay.
It is the fifth year in a row that #John Lewis has cut the bonus. Last year the bonus – which is the same proportion of salary for all workers, from the chairman to Saturday shelf-fillers – was 6%, the lowest level since 1954, when it stood at 4% of pay. The year before it was 10%, the lowest for 13 years.
It followed a 77% fall in annual profits to £103.9m in the year ending 27 January after the retailer took a £111m one-off hit, mainly relating to redundancy and restructuring costs.
Before one-off items, pretax profits fell nearly 22% to £289.2m, largely as a result of lower profit margins at the Waitrose supermarket chain driven by the fall in the value of the pound, which has increased costs and a “commitment to competitive pricing”.
The company said it expected trading to be volatile in the coming year, with “continuing economic uncertainty and no let-up in competitive intensity. We therefore anticipate further pressure on profits”.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said: “As we anticipated, 2017 was a challenging year. Consumer demand was subdued and we made significant changes to operations across the Partnership which affected many partners.
“However, their hard work throughout the year was key to delivering gross sales of £11.6bn, up 2%, with like-for-like increases in both Waitrose and John Lewis.
“We said in January 2017 that we were preparing for tougher trading conditions with weakness in sterling feeding through into cost prices, putting pressure on margin, and much higher exceptional costs as a result of an acceleration of planned changes.