John Lewis staff to share £181m bonus as profits rise 20 per cent

Almost 70,000 staff at John Lewis will each receive a bonus worth 20 per cent of their annual salary after the announcement of bumper profits by the department store and supermarket chain yesterday.

The group told "partners" in the business – the company's 69,000 employees – that they would share a bonus pool of £181.1m, the equivalent of around 10 weeks' pay. The figure was £27m up on last year's payout, with every single employee receiving the same percentage bonus, however senior or junior.

The bonus level – the highest since the mid-Nineties – reflected a strong year of trading at the group, with profits up 19.7 per cent to £198.7m after the bonus.

The group's total sales were 6.3 per cent higher at £6.8bn, with John Lewis department stores contributing around £2.8bn of the total, and about £4bn coming from the company's Waitrose supermarket chain. John Lewis's online business recorded very strong results, with sales up 45 per cent to £268m.

Staff at John Lewis had been expecting good bonuses, but the payout was above most workers' expectations. More than 1,000 workers were given the news personally through a shop-floor announcement at the company's flagship store in London's Oxford Street, where staff crowded on to balconies and around escalators.

The 20 per cent figure won cheers from staff, with similar scenes at other outlets around the country where the bonus was unveiled shortly before opening time. In each branch of John Lewis or Waitrose, one member of staff was picked to open an envelope with details of the bonus and to announce the figure to colleagues.

However, while the company escaped the disappointing run-up to Christmas experienced by some retailers, Charlie Mayfield, John Lewis's chairman, warned it was finding 2008 much tougher.

"We expect trading conditions to be very challenging this year as consumers continue to respond to concerns about the housing market, higher food and energy costs and tighter credit conditions," Mr Mayfield said.

John Lewis's department store has been hit by the slowdown in the housing market, which has led to a fall-off in demand for home furnishings and related products.

However, the slowdown does not yet seem to have hit Waitrose. While sales at the 26 department stores were up by only 2 per cent over the five weeks to 1 March, the group's 187 supermarkets posted an 8 per cent increase in sales.