The John Lewis Partnership has cut its renowned staff bonus to 5% of salary as it posted a 77% plunge in pre-tax profits to £103.9 million for the year to January 27.
Chairman Sir Charlie Mayfield said: “Consumer demand was subdued and we made significant changes to operations across the partnership which affected many partners.
“We said in January 2017 that we were preparing for tougher trading conditions with weakness in sterling feeding through into cost prices, putting pressure on margin, and much higher exceptional costs as a result of an acceleration of planned changes.
“This was why we chose to reduce the proportion of profits paid as partnership bonus last year so as to absorb these impacts while continuing to invest in the future and in strengthening our balance sheet.”
Across the partnership gross sales rose 2% to £11.59 billion.
Operating profit before exceptionals at John Lewis rose 4.5% to £254.2 million, but Waitrose, also part of the partnership, saw profits collapse.
The upmarket supermarket posted a 32.1% decline in operating profit to £172 million.
The group said it expects trading this year to be “volatile” with continuing economic uncertainty and “no let-up in competitive intensity”, adding that it anticipates further pressure on profits.