John Lewis Partnership is to slash staff bonuses to the lowest level in 60 years amid increasing pressure.
The parent company of department store John Lewis and grocer Waitrose is expected to announce a cut in staff bonuses from 10 per cent of their annual wage to between six and seven.
Despite being owned by its staff members, this is the fourth year in a row bonuses have been cut and will mark the lowest level since 1950 when it was just four per cent.
This comes amid expectations that the group will report a 10 per cent drop in underlying profits for 2016.
The historic scheme which started in 1969 in which all employees take an equal share of the profits, has seen a significant decrease in recent years.
In 2013 the figure stood at 17 per cent of annual wage, dropping over 10 per cent in four years.
The partnership has encountered increasing competition from online retailers, with Waitrose also feeling the squeeze from rival grocers as it announced a spate of job cuts and store closures last year.
Paula Nickolds, the new managing director of John Lewis, also announced hundreds of job cuts last month.
The partnership’s chairman Sir Charlie Mayfield has also issued a warning over the cost pressures brought on by the Brexit vote, which he predicts will start to affect British businesses this year.
“The John Lewis board is likely to be mindful of the fact that underlying profits look to have fallen by over 10 per cent last year, despite a decent Christmas,”retail analyst Nick Bubb told the Guardian.
“With trading in the new year off to a sluggish start, it will have to allow for the fact that profits will probably fall again this year as well – hence the significant pressure on the bonus that it flagged on 12 January,”