Employees of the John Lewis Partnership can expect their annual bonuses to shrink this year.
Bonuses are unlikely to be higher than six or seven per cent of income when the company releases full-year results on Thursday, according to sources close to the situation. This is down from to a 10 per cent bonus last year.
The group is expected to report a strong overall performance for 2016, following a 4.9 per cent year-on-year increase in sales over the Christmas period. This year's annual profits are likely to be higher than last year's £306m.
However, a difficult trading environment means the group is treading carefully. In an unusual move, it issued a warning that staff bonuses would be “significantly lower” this year in its Christmas trading update in January.
Sir Charlie Mayfield, chairman of the John Lewis Partnership, said in January: “although we expect to report profits up on last year, trading profit is under pressure. This reflects the greater changes taking place across the retail sector. We expect those to quicken, especially in the next 12 months as the effects of weaker Sterling feed through. We will now accelerate aspects of our strategy. This will involve a period of significant change, investment and innovation to ensure the Partnership's success.”
The partnership, which includes Waitrose supermarkets as well as the John Lewis department store chain, employs 88,900 permanent staff.