John Lewis shrinks staff bonus

JOHN LEWIS Partnership, Britain's biggest worker co-operative, yesterday announced its smallest staff bonus for 33 years, writes Patrick Hosking. Its 34,000 employees or 'partners' will receive 8 per cent of annual pay, an average of pounds 900 each.

JLP, which operates department stores and Waitrose supermarkets, strongly hinted that the bonus could drop again next time, warning that it faced a sharp fall in profits this year.

The bonus compares with 9 per cent last year and more than 20 per cent in the late 1980s. However, JLP staff were mostly relieved because prospects looked even bleaker at the half-year.

Pre-tax profits fell 8 per cent in the year to 30 January to pounds 71.4m as sales grew by 3 per cent to pounds 32.36bn. The group was hit by poor department store sales in the first half and poor Waitrose sales in the second half as competitors opened on Sundays.

Higher tax and interest charges left the group with pounds 62.2m for reinvestment or distribution to staff, compared with pounds 68.8m last time. After the payout, funds left for expansion are pounds 34m ( pounds 38.6m).

Stuart Hampson, chairman, said: 'I wish I could tell partners that we had reached the bottom of the trough, but the year ahead is still far from certain. As we stand today, the prospect is of yet another year of falling profit, perhaps even of sharply falling profit.'