Business

John Lewis cuts bonuses to staff for the third year

John Lewis and Waitrose staff clapping Image copyright Reuters

More than 90,000 John Lewis and Waitrose staff have seen their bonuses cut for the third year running, to 10% of their annual salary.

Last year it was 11%, as against 15% in 2014 and 17% in 2013.

The partnership announced a 24% rise in annual profits before tax to £435m, ending 30 January.

However, higher pension charges and lower property profits meant pre-tax profits before exceptional items fell to £305.5m, from £343m last year.

It said the pension operating cost was £245.3m, an increase of £54.2m or 28.4% on the previous year's costs.

Sir Charlie Mayfield, chairman of John Lewis Partnership, said: "The partnership has delivered a healthy trading performance and increased market shares in challenging conditions."

Some staff at the partnership reacted positively on Twitter to the bonus announcement, which is the equivalent of five weeks' pay, saying it is better than they expected.

Image copyright Matt Cardy/|Getty Images

Waitrose, which is owned by the same partnership, reported an operating profit of £232.6m, which was 2% down on last year.

However, profits from the sale of property and an additional trading week in 2014 meant that the figure for the previous year had been flattered. Once this was taken into account, the supermarket actually achieved a 3.9% increase in operating profits for 2015, Waitrose said.

The partnership said this was against a backdrop of price cuts in the supermarket sector and continuing food price deflation.

Annual like-for-like sales at the supermarket were down 1.3% compared with the previous year.

John Lewis shops saw its operating profit before exceptional items fall slightly, to £250m.

There was growth in sales and market share across fashion, and home, as well as electrical items and home technology.

Online sales and its click-and-collect service continued to strengthen, with the collection of John Lewis orders from Waitrose up 19%.

John Lewis said that trading conditions would remain difficult, especially in food retailing, but it expected to perform comparatively well against its rivals.

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