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John Lewis cuts staff bonus to lowest level since the 1950s as profits drop

The John Lewis Partnership has unveiled its annual results. Credit: PA

John Lewis has cut its staff bonus to the lowest level since the 1950s, as the retail giant revealed a slump in annual profits.

The retail partnership, which includes Waitrose supermarkets, said it will reduce the renowned bonus to 3% of annual salary.

This means 83,000 partners share out a pot worth £44.7 million, down from £74 million the previous year.

John Lewis has cut the bonus for six years running now, and the latest figure is down from 5% last year.

The John Lewis partnership also includes Waitrose supermarkets. Credit: PA

The partnership warned in January that it might have to axe the renowned payout for the first time since 1953 as it battles challenging trading conditions.

It came as the group saw profit before tax, exceptionals and bonus plummet 45.4% to £160 million.

While overall revenue climbed 1% to £10.3 billion for the period ending January 26, operating profits were down sharply due to challenges at John Lewis.

Operating profit at the department store fell by 56% to £114.7 million due to weaker home sales, tighter margins, higher IT costs and the cost of new shops.

In contrast, operating profit at Waitrose recovered, climbing 18% to £203.2 million.

Chairman Sir Charlie Mayfield said: "In line with expectations set out in June, our Partnership profits before exceptionals have finished substantially lower in what has been a challenging year, particularly in non-food."

He warned trading conditions are set to remain challenging in 2019, but added the partnership was "confident in our strategic direction and customer offer across both brands".