John Lewis Partnership cuts staff bonus as profits plunge
Staff at the John Lewis Partnership will see their bonuses cut for the sixth consecutive year as the retail giant revealed a slump in annual profits.
The group said it will reduce the renowned bonus to 3% of annual salary, with 83,000 partners sharing a pot worth £44.7 million, down from £74m the previous year.
The latest figure is down from 5% last year and marks the lowest bonus since 1953.
The partnership, which includes upmarket supermarket Waitrose, warned in January that it might have to axe the renowned payout as it battles challenging trading conditions.
It came as the group saw profit before tax, exceptionals and bonuses plummet 45.4% to £160m.
While overall revenue climbed 1% to £10.3 billion for the period ending January 26, operating profits were down sharply due to challenges at John Lewis.
Operating profit at the department store fell by 56% to £114.7m due to weaker home sales, tighter margins, higher IT costs and the cost of new shops.
Like-for-like sales were down 1.4%.
In contrast, operating profit at Waitrose recovered, climbing 18% to £203.2m. The supermarket’s like-for-like sales jumped 1.3%.
Chairman Sir Charlie Mayfield said: “In line with expectations set out in June, our partnership profits before exceptionals have finished substantially lower in what has been a challenging year, particularly in non-food.”
He warned that trading conditions are set to remain challenging in 2019, but the partnership was “confident in our strategic direction and customer offer across both brands”.
After accounting for exceptional items and the bonus payout, pre-tax profit was up 9.2% at £117.4m.