John Lewis Partnership Plc, owner of the U.K.’s largest department-store chain, said annual profit fell 3.8 percent and reduced its staff bonus for the first time in three years after matching competitors’ discounts.
Pretax profit declined to 353.8 million pounds ($557 million) in the year ended Jan. 28, from 367.9 million pounds a year earlier, the employee-owned company said today. John Lewis cut the staff bonus by 15 percent to 165.2 million pounds.
John Lewis has ramped up promotions and extended its Never Knowingly Undersold promise to include online competitors as it seeks to keep customers spending amid the Eurozone debt crisis and rising unemployment. U.K. retail sales fell for a second month in February as a drop in purchases of clothing countered gains at food stores, the British Retail Consortium said.
“Current trading conditions are still difficult and consumer confidence remains subdued,” Chairman Charlie Mayfield said in a statement. Mayfield said he’s “cautiously optimistic” that the climate may improve later in the year, as celebrations for Queen Elizabeth II’s Diamond Jubilee and the London Olympic Games provide “a lift for consumers.”
Sales in the first five weeks of the current fiscal year rose 7.7 percent, excluding value-added tax, the retailer said. Growth was led by an increase of 8.9 percent at the Waitrose grocery chain. Revenue at John Lewis department stores gained 5.2 percent, or 2.4 percent at stores open at least a year.