John Lewis considers axing bonuses

STAFF BONUSES are under threat at John Lewis for the first time in living memory as the retailer battles challenging trading conditions.

Around 83,000 staff are usually awarded the payout in March, but the John Lewis Partnership said it expects profits to be “substantially lower” this year amid slower sales growth, meaning the bonus could be axed.

Sir Charlie Mayfield, the partnership’s chairman, said: “The board will need to consider carefully in March, following the usual process, whether payment of a bonus is prudent in the light of business and economic prospects at that time.”

It would be the first time since 1953 that staff have not received an annual bonus.

Sir Charlie added that the group is experiencing a higher level of uncertainty in the run up to Brexit.

At its half year trading update in September, the partnership saw profits fall by 98.8 per cent to £1.2m.

“We are in a very unusual economic and political circumstances. It all comes down to a judgment on what is best for the Partnership,” Sir Charlie said.

“No one is getting rid of the bonus, bonuses go up and down. It’s affordable but the board needs to decide if it’s prudent.”

The announcement came alongside the firm’s Christmas trading update, which saw the department store chain record like-for-like sales growth of just one per cent in the seven weeks to January 5.

Total sales across the partnership were up 1.4 per cent over Christmas to £2.2bn, but the firm said profit margins remain under pressure.

Comparable sales at sister chain Waitrose rose by only 0.3 per cent, despite a sharp reduction in the level of promotions.