More than 90,000 Waitrose and John Lewis staff will see staff bonuses cut to 11% of their salary this year, it was announced today.
It is the second year in a row that the payout has been reduced after staff - including those at the Horley branch of Waitrose - received 15% last year and 17% the year before.
We expect the returns for the grocery sector to be materially lower for a period of timeSir Charlie Mayfield
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 January 31, down 9%.
Stripping out the last week of trading to compare with last year’s 52-week figures, profits were down by 10.5%.
The group said the partnership bonus of £156.2 million was equivalent to nearly six weeks’ pay. It applies to 93,800 staff.
Results were dragged down by the impact of the supermarket price war on Waitrose, which saw operating profits fall to £237.4 million, a 24.4% fall on a comparable 52-week basis - despite a 1.4% rise in like-for-like sales.
Partnership chairman Sir Charlie Mayfield said the supermarket was held back by “the impact of trading in a highly competitive and deflationary market” and warned of more pain to come.
Waitrose has had a tough start to the new trading year, with like-for-like sales excluding petrol down 2.8% in the first five weeks.
Annual earnings were hit by investment in IT systems and opening 13 new “core” branches - including eight acquired from the Co-operative - and another 20 convenience shops, as well as other one-off items including property charges.
The high-end retailer has been ramping up promotions as it bids to be more competitive on price in a market where major grocers are battling against the threat of discounters Aldi and Lidl but this is blamed for a hit on its margins.
Sir Charlie said: “We expect the returns for the grocery sector to be materially lower for a period of time.
“Waitrose’s value perception has improved significantly over the last few years and we will continue to defend that hard-won position during this period of change in the grocery sector.”