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
Start your day with The Independent, sign up for daily news emails
News
peopleComedian launches stinging attack on PM
Life and Style
The collection displayed Versace’s softer side, with models wearing flowers and chiffon dresses in unusual colourings
fashionVersace haute couture review
News
Andy Murray shakes hands after defeating Andreas Seppi of Italy in the third round of Wimbledon, Saturday 4 July, 2015
Wimbledon
Arts and Entertainment
'The Leaf'
artYes, it's a leaf, but a potentially very expensive one
News
Yoko Ono at the Royal Festival Hall for Double Fantasy Live
people'I wont let him destroy memory of John Lennon or The Beatles'
News
Could Greece leave the EU?
news
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'