The employee-owned John Lewis Partnership is considering scrapping its staff bonus this year in a further sign of turmoil on the high street.
John Lewis chairman Sir Charlie Mayfield warned that full-year profits will be “substantially lower” this year.
The partnership, which comprises the department store and Waitrose, reported a 1.4% rise in like-for-like gross sales to £2.2bn during the seven weeks to 5 January, compared with the previous year.
At John Lewis & Partners, gross sales grew by 2.5% to £1.2bn and were up 1% on a like-for-like basis.
At Waitrose, like-for-like sales increased by 0.3% to £1bn.
Mayfield said: “Two main factors are affecting the retail sector: oversupply of physical space and relatively weak consumer demand.
“Despite this, we had a positive Christmas trading period thanks to the extraordinary efforts of partners in our business, delivering differentiated products and service to customers.
“The actions taken in recent years to prepare for the current pressures in retail mean that the partnership has the financial strength and flexibility to pay a modest bonus this year, without impacting our ambitious investment programme.
“However, 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.”
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