M&S staff bonus slashed despite £1bn profits

Marks & Spencer's annual profits topped £1 billion for the first time in a decade today, but staff failed to cash in after the retail giant slashed bonus payouts.

The company's 62,000 customer assistants - who gained up to £500 last time - will see payouts fall by half to a maximum of £250.

Chief executive Sir Stuart Rose - who received a total bonus of £2.6m last year - will gain no extra payout at all after the group missed internal targets, details of which were not disclosed.

M&S's staff pot of £16.8m is a fraction of last year's record £91 million windfall. Only head office staff working on the better-performing online and international operation will be in line for any payouts.

The gloom for staff came despite the best profit performance for ten years, although City analysts expect this to fall to around £925m next year in a darkening retail climate.

Collins Stewart's Rob Mann said: "Although the headline numbers will no doubt be taken positively, this set of results is delaying the inevitable."

Shares in M&S barely moved today despite the company beating market forecasts of £989m by £18m.

Sir Stuart - who has led the turnaround of the business since 2004 - said trading since the end of March had been "mixed", with sales suffering in April's downpours before recovering with better weather earlier this month.

The M&S chief remains cautious over consumer sentiment, although the group still intends to spend up to £900m on its stores this year.

The company said it now has more than 21 million customers shopping in its stores every week, 400,000 ahead of the previous year.

Sir Stuart added the earlier Easter and poor weather had led to volatile trading conditions, making it hard to pick underlying trends.

"We are all finding it very difficult to read the tea leaves," he added.

But he argued the company was well-placed to cope with a downturn, saying it was a "strong business in a weak market".

There were fears in the City over M&S's clothes sales after poor figures from rival Next, but the group cut prices to protect market share as well as extending the range of its Autograph collection.

Like-for-like sales among general merchandise - which includes clothing - fell 3.1 per cent in the first three months of the year, slightly better than most forecasts, although the earliest Easter for almost a century boosted the numbers.

Meanwhile food shoppers could soon be able to buy well known brands such as Marmite and Heinz tomato ketchup at M&S stores for the first time, after the group announced plans to trial the sale of around 350 branded products at 19 stores in Tyneside and Teesside from June.

The pilot forms part of plans to boost its food market share to 5 per cent. The plans also include another 70 Simply Food stores, expanding the range of products on offer, and selling better value everyday items. Like for like food sales fell 0.5 per cent in the fourth quarter.

The company has also identified £50 million in savings through reducing overheads and trimming marketing spending for the coming year, although Pali International analyst Nick Bubb remained doubtful over the firm's prospects.

He said: "M&S have found £50m of other cost savings, but they can't slash the staff bonus twice. The main driver of cost growth this year is the huge amount of new space (the company) is bringing on stream and there is not much that M&S can do to slow that down."

Sales from the M&S Direct online business rose 63 per cent last as the firm made progress towards its target of achieving £500m of sales by 2010/11.

International sales were up 16.8 per cent at £712.9m, with new stores opened in the Republic of Ireland, Taiwan, Lithuania, Serbia, Ukraine, Libya, Russia and Saudi Arabia, taking its global reach to 40 territories.

Overall the group has 622 UK stores and 278 international outlets.

Suggested Topics
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
David Moyes and Louis van Gaal
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Life and Style
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Worldwide ticket sales for The Lion King musical surpassed $6.2bn ($3.8bn) this summer
tvMusical is biggest grossing show or film in history
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Life and Style
food + drink
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits