John Lewis employees will get a smaller bonus, Getty images
Staff bonuses at the John Lewis Partnership were cut for the first time in three years on Wednesday, after annual profits fell 3.6 per cent.
The bonuses are now 14 per cent of workers' salaries, compared with 18 per cent last year. The employee-owned group gives each worker the same percentage of salary as a bonus.
The partnership said that increased investment in online business and the opening of new stores had caused profits to fall. The firm also struggled as a result of John Lewis’s “never knowingly undersold” policy - which now includes a pledge to match online competitors.
The firm said it was working in "difficult economic conditions" but that it was "cautiously optimistic" that trading conditions would improve. Sales in the first five weeks of the new year rose 7.7 per cent.
"Current trading conditions are difficult and consumer confidence remains subdued. Despite that we are continuing to grow faster than the market" Chariman Charlie Mayfield told Reuters.