John Lewis staff bonus cut to lowest level in 63 years after 77pc profit slump

Workers at the John Lewis Partnership will receive a bonus worth just 5pc of their salary this year after the retailer cut the annual payout to its lowest level in 63 years.
Pre-tax profits at the employee-owned company sank 77pc to ?104m in the year to January 27 due to ?111m worth of restructuring costs and property impairments and narrower margins at its supermarket chain Waitrose.
The partnership’s chairman Sir Charlie Mayfield admitted it had been a “challenging year” of “subdued” consumer demand, but hailed a 2pc rise in revenues to ?11.6bn with growth in same-store sales at both Waitrose and John Lewis.
The drop in profits was compounded by ?171m of one-off gains from a change to its pension plan in the previous year but even on an underlying basis profits were down 22pc on last year.
John Lewis staff bonus cut to lowest level in 63 years after 77pc profit slump

Sir Charlie Mayfield, chairman of JLP
Profits at Waitrose dropped more than 32pc after it was trapped between rising costs due to the weak pound and tough competition that forced it to cut prices to cling on to market share.
The supermarket chain’s boss Rob Collins said: “Many of our cost prices have increased by more than three times our retail prices and that's particularly true of meat, fish and dairy.”
Waitrose’s finances were also disrupted by a shake up in its operations, including the scrapping of 722 management roles, Mr Collins said.
John Lewis itself fared better, with operating profits up 4.5pc and sales in stores open more than one year up 0.4pc, as it gained a bigger share of the fashion, home and electronics markets.
The partnership said it expected “further pressure on profits” this year amid “volatile” trading conditions, “continuing economic uncertainty” and intense competition.
John Lewis staff bonus cut to lowest level in 63 years after 77pc profit slump

Profits at Waitrose have been squeezed by the weak pound and tough competition
But Sir Charlie insisted this is “absolutely no time for a defensive crouch”. 
He added: “On the contrary our whole gameplan for our business is to step up to these challenges and we'll be upping the pace of innovation in the year ahead.”
Sales in the first five weeks of the year were up 0.6pc thanks to 2.7pc growth at Waitrose, while sales at John Lewis itself were down 2.8pc, mostly because of last week’s heavy snow.  
Kate Ormrod of Globaldata said Waitrose needed to keep prices low in order to offer value for money but that “maintaining its high standards and introducing newness is a must” as it battles competition from discounters such as Aldi and Lidl.
The partner bonus is down from 6pc last year after it was cut for the fifth time in as many years. But Sir Charlie said JLP was “committed to increasing pay rates for non-management partners”, who, as of January, made an average of ?8.91 per hour.  
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