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John Lewis cuts bonus as profit dips

Staff at John Lewis and Waitrose saw their annual bonus cut for the first time in three years today as the retailerÂ’s profits were squeezed by its "never knowingly undersold" policy which pledges to match rivals' discounts and special offers.

CITY & CORPORATE

John Lewis cuts bonus as profit dips

Staff at John Lewis and Waitrose saw their annual bonus cut for the first time in three years today as the retailerÂ’s profits were squeezed by its "never knowingly undersold" policy which pledges to match rivals' discounts and special offers.

The John Lewis Partnership announced in its full-year results for the year to 28 January that it will pay staff 14% of salary from a bonus pot of £165.2 million compared to last year’s 18% from a pot of £194.5 million.

Although the Partnership's gross sales were up 6.4% to £8.73 billion on the previous year, operating profit was down 8.7% to £393.3 million.  Profit before Partnership Bonus and tax was down 3.8% to £353.8 million.

John Lewis said that increased investment in its online business and new stores openings also contributed to the profit fall.

Gross sales at John Lewis department stores grew 3% to £3.3 billion in the year while those at the Waitrose supermarkets rose 8.6% to £5.4 billion. Online sales at johnlewis.com increased by 26.3% to £680.8 million

The partnership created 4,400 new jobs in the year and said it expects to deliver a  further 1,900 in 2012. It had also invested £21.3 million in improving its operating structures.

Charlie Mayfield, chairman of John Lewis Partnership, commented: "We have achieved a good sales performance in a tough year for the economy. Profits are lower than last year, but better than expected and I'm delighted to announce that all 81,000 Partners will be receiving a bonus equivalent to over seven weeks' pay.

"Profound changes are taking place in the retail sector and importantly this was a year when we upped the pace of innovation and investment. That came at the price of some short-term profit but leaves us in a good place at the start of this year."

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