John Lewis is cutting its staff bonus to the lowest level in 66 years, after seeing profits slump 45 per cent to £160 million in the year to the end of January.
The company has said that 83,900 workers, known as partners owing to the matter they jointly own the business, would receive a bonus worth three per cent of annual pay.
Last year the bonus was five per cent of annual pay after profits fell at the group, including John Lewis department stores and Waitrose supermarkets.
Sir Charlie Mayfield, the chairman of the John Lewis Partners group, said: “The market context continues to be challenging. That’s evident in our results, especially John Lewis & Partners, where we saw near constant discounting across many categories from October onwards in response to the combination of subdued demand, excess retail space and some other retailers’ distress.”
Mayfield said that cutting the bonus enabled the company to continue debt reduction, maintain investment and retain solid cash reserves to cope with the uncertainty facing consumers and the economy.
“We expect 2019 trading conditions to remain challenging but are confident in our strategic direction and customer offer across both brands,” he said.