John Lewis cuts bonus to lowest level in 12 years

Annual bonuses at the employee-owned business were cut to 11 per cent as pretax profits fell to £342.7 million

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The Independent Online

Workers at the John Lewis Partnership suffered disappointment today as their annual bonus at the employee-owned business hit 11 per cent - the lowest level in 12 years.

Sales at the department store and its sister supermarket Waitrose rose 5.6 per cent to £9.7 billion but pretax profits fell 10.5% to £342.7 million.

Its supermarket division was hit hardest, with profits plunging 24.4% to £237.4 million, while John Lewis profits rose 10.4 per cent to £250.5 million.

John Lewis Partnership chairman Sir Charlie Mayfield said: “The bonus always reflects the performance of the business but I don’t think it tells the full story. Sales have been very good at a time when we are seeing a grocery market in turmoil.”

He warned that the supermarket sector will remain tough: “The sector is seeing deflation and that’s having a significant impact. Much has been made of the impact of discounters on the market, but the biggest impact is from deflation from bumper harvests and the costs of food products falling.”

At John Lewis, he said the department store was starting to feel the effects of an improving economy.

He said: “We’ve seen a terrific resurgence in homeware and we think that is definitely being helped by the improving economy and the housing market.”

The bonus last year was 15 per cent and was 17 per cent in 2013.