Bonuses for 86,700 staff at John Lewis and Waitrose have been cut for the fourth year in a row.
Employees will get a 6% bonus, more than three weeks’ wages, down from 10% last year and the lowest since 1954, when it was 4%.
The partnership said it held back more of its profits due to an “increasingly uncertain market this year”.
The group, which runs department stores and supermarkets, also warned of price pressures and intense competition.
John Lewis, which owns Waitrose supermarket, is owned by a trust on behalf of employees, frequently referred to as partners. These influence the business through branch forums and elect some 80-plus representatives to the Partnership Council.
New products boost
Despite the cut in staff bonuses, John Lewis reported a rise in sales and profits last year.
Profit, before the partnership bonus, tax and exceptional items, rose 21.2% to £370.4m. Overall sales rose 3.2%, with both John Lewis and Waitrose increasing their market share.
The John Lewis department stores, which say they are “never knowingly undersold” on price, saw sales growth in all major areas.
New products such as the Dyson Supersonic hairdryer helped the electronics division, while fashion sales were helped by stocking the brands Finery and Hush, which were previously online only.
The Waitrose supermarkets saw like-for-like sales – which strip out the impact of store openings and closures – fall 0.2%, although the company said trading improved in the second half of the year. It is changing its focus to investing in existing stores rather than opening new ones.
Waitrose is also looking to export more. A deal with China’s Alibaba Group allows it to sell products in the country for the first time, and an agreement with the online retailer British Corner Shop, which sells in more than 100 countries, allows it to export elsewhere.
However, John Lewis acknowledged that trading would continue to be tough as it battles the same issues affecting other High Street retailers.
“In the year ahead, trading pressures will continue as a result of the wider changes taking place in retail,” the partnership said.
“The two major influences are pricing, where the rate of change in selling prices is likely to be significantly slower than the rate of change in input costs as a result of weakness in the sterling exchange rate, and the continued shift from shops to online.”