STAFF at John Lewis have seen their annual bonus reduced for the fifth consecutive year amid a huge 77% fall in profits at the partnership.
The group’s 85,500 staff will receive a bonus of five per cent of their salary, down from 6% last year.
John Lewis itself was described as having a “strong” year, but the group was weighed down by a sluggish performance at its supermarket chain Waitrose, which saw operating profit fall by more than 40%.
Revenue at a group level was up 2% to £11.6 billion for the year to January 27, but the impact of Waitrose left pre-tax profits down 77% at £103.9m.
Margin erosion at Waitrose, driven by the sustained fall in the value of sterling since the Brexit vote, and its commitment to remain price competitive, was responsible.
The business also faced exceptional charges of £282.5m, with £72.8m of redundancy and restructuring payments.
Sir Charlie Mayfield, chairman of John Lewis Partnership said he anticipated further pressure on profits in 2018, a year which he said would be “volatile, with continuing economic uncertainty and no let-up in competitive intensity.”
John Lewis sales of £4.9bn were up 2.2 per cent, and 0.4% on a like-for-like basis. Operating profit before tax was flat at £233m – aided by the disposal of a freehold property.
Fashion sales were up 3.2%, boosted by a particularly strong performance in womenswear. Electrical and home technology sales were up 2.6%.
Waitrose achieved gross sales of £6.75bn, up 1.8%, with like-for-like sales, excluding fuel, up by 0.9%. But, the group said lower margin was equivalent to more than 80% of the shortfall in operating profit.
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