John Lewis Partnership cuts staff bonus as Waitrose struggles

Staff bonuses at the John Lewis Partnership were being cut for the third year in a row on Thursday, with the company's workers told to expect payouts equivalent to 10% of their annual salary in 2016.

The partnership handed out bonuses worth 11% of salaries last year, 15% the year before that and 17% in 2013.

JLP - owned collectively by the employees of the John Lewis and Waitrose retail chains - reported a pre-tax profit in the year to 30 January at £305.5m, down from £342.7m a year earlier.

The results came as grocer Waitrose was suffering from the UK's supermarket price war. Its operating profits slid to £232.6m for the year, down from £237.4m.

Like-for-like sales, excluding petrol, also fell by 1.3%.

Chairman of the John Lewis Partnership, Sir Charlie Mayfield, described the results as a healthy trading performance, claiming it had improved its market share despite the industry challenges.

"Market conditions were challenging through the year with deflation in grocery of -2.6% and subdued demand in non-food."

"Quality, value and product innovation were therefore all the more important alongside greater convenience and service. Our partners performed well on all those fronts, and did so while controlling costs tightly and increasing margin," he explained.

Department store arm John Lewis saw its operating profit before exceptional items slip 0.2% to £250.2m, while like-for-like sales grew 3.1%.