JOHN Lewis Partnership slashed staff bonuses to 11 per cent of pay, the lowest level for 12 years, after profits fell at its grocery chain Waitrose.
The partnership’s 93,800 employees will receive a total pay out of £156.2m, which is equivalent to nearly six weeks’ salary.
The supermarket price war, a deflationary market and a significantly higher level of investment in technology reportedly took their toll on Waitrose’s pre-tax profits, which fell by 23.4 per cent to £237m.
In contrast, John Lewis reported a strong year, with record sales on Black Friday contributing to a rise of 9.2 per cent to £4.43bn and profit up 10.8 per cent to £250.5m.
The department store slightly offset Waitrose’s declining figures and the partnership reported pre-tax profits of £342.7m, down nine per cent, for the 53 weeks to 31 January.
In a revival bid last year, Waitrose launched click-and-collect service lockers in six tube stations, opened up cookery schools and launched gardening departments to some stores.
Despite this, 2015 looks challenging for Waitrose with sales down 2.8 per cent after the first five weeks of the current year.
Mark Price, the managing director of Waitrose, said cutting prices to compete in a “highly competitive and deflationary market” had cost the business between £35m and £45m.
“To quote Churchill: ‘This is not the end, this is not even the beginning of the end but perhaps it is the end of the beginning.’,” he added.
“There are dramatic changes in food retail, in shopping online, using convenience stores and eating out more. That change is going to take a long time to work through and not going to be over this year or next year. It is going to take the best part of a decade in my view.”
He said that Waitrose would fight back by keeping prices competitive, offering high-quality fresh food and offering more services such as in-store cafes and restaurants and online ordering.