STAFF bonuses for more than 90,000 John Lewis and Waitrose staff have been cut to 11 per cent of salary for the most recent trading year, with tough conditions leading to a 9 per cent fall in profits.
The payout has been cut for the second consecutive year, after staff received 15 per cent in the previous 12 months and 17 per cent the year before.
John Lewis Partnership, which is owned by employees of the two retail chains, reported pre-tax profits before exceptional items of £342.7 million for the 53 weeks to end-January. Excluding the extra week of trading to compare with the previous 52-week period, profits fell 10.5 per cent.
The group said the bonus of £156.2m was equivalent to nearly six weeks’ pay. Earnings were dragged back by the impact of food price deflation and the supermarket price wars on Waitrose, which saw operating profits fall 24 per cent to £237.4m.
Waitrose’s same-floorspace sales in the first five weeks of the new financial year are down 2.8 per cent. Profits at the John Lewis department store chain rose 10.8 per cent to £250.5m, with like-for-like sales over the five weeks up 2.6 per cent.
Sir Charlie Mayfield, chairman of John Lewis Partnership, said customers were increasingly shopping online. “We spent three times more on IT this year [£189m] than we did five years ago,” he said.
Mark Price, Waitrose MD, added: “It’s predicted that online will double [in sales] over the next five years.” He said deflation was a problem the food industry had to live with now, citing milk down 28 per cent, white bread down 17 per cent last year and onions 36 per cent.
“This is not a game on these [staples] where you can stand aside from the market and not see a volumes impact,” Price said.
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