John Lewis bonus cut to lowest since 1953

JOHN Lewis’s boss warned that the crisis crippling the High Street will last another ten years as the company slashed bonuses to the lowest level since 1953.

In a bleak assessment of the industry’s future, Paula Nickolds, the department store’s managing director, said: ‘We should expect to see this as a five to ten year change in the nature of retail.’

The stark warning came as the John Lewis Partnership, which also owns Waitrose, handed its 83,000 staff a bonus totalling 3pc of salaries, equivalent to almost two weeks’ pay.

It is dramatically lower than the 20pc given to employees in 2008 and the lowest since 1953 when staff got nothing. The retailer blamed a downturn on the High Street for its struggles.

Sir Charlie Mayfield, chairman of John Lewis Partnership, said it had been ‘a challenging year’.

The John Lewis Partnership suffered a 45pc slump in profits to £160m in the year to January 26.

Despite an increase in profits and sales at Waitrose, the department store dragged on the group as it posted a 56pc dive in profits £114.7m and a 1.4pc fall in sales compared with a year earlier.

John Lewis has a unique partnership structure which distributes profits to all its employees – who are described as partners – through bonuses.

The group said cutting the bonus for the sixth year in a row will allow it to continue slashing its debt pile and investing in stores.

However, many staff expressed relief at the news of a 3pc bonus with some reports suggesting it could be axed altogether.

Mayfield said: ‘Downstairs in the dining room here there was a cheer louder than we’ve had sometimes on 15pc.’ Laith Khalaf, a senior analyst at investment firm Hargreaves Lansdown, said that, given current trading conditions, the bonus of 3pc is ‘better than a poke in the eye’.