Thursday, March 11, 1999 Published at 15:38 GMT
Business: The Company File
Sluggish shopping knocks John Lewis
Staff will still get an annual bonus, if slightly less than last year
A slowdown in consumer confidence has resulted in a fall in profits for the UK department store chain, John Lewis Partnership.
But a VAT rebate, which added an extra £30m to the partnership's coffers, eased staff fears that their annual bonuses would have to fall sharply.
Employee bonuses will dip only slightly form 22% to 19% of last year's salary - costing £89m.
After the pay out, the partnership's pre-tax profits for the year to 30 January stood at £147.9m, down from £152.6m last year.
Sales in John Lewis stores were static at £1.79bn, while sales at its Waitrose supermarkets rose to £1.73bn from £1.67bn.
'Sticky' time ahead
Chairman Sir Stuart Hampson said: "All we need is for a little more confidence among consumers to blow non-food retailing out of the doldrums."
He said the retail cycle was a well recorded phenomenon and the chain had plenty of experience managing the ups and downs.
"I foresee a sticky few months ahead, when control of costs will be essential to holding on to profit. The second half might be a little easier as we run towards the millennium, but this is a year for taking every week as it comes."
The group plans to increase the number of shops in both chains, with two new department stores due to start trading in the next few weeks - one at the Bluewater shopping centre, near Dartford in Kent, and one in Glasgow.
Two more department stores are currently being built in Southampton and Solihull.
Seven new Waitrose supermarkets are also planned for Surbiton, Malvern, Oakhampton and Staines and three in London.
The Waitrose building programme is one of the partnership's largest supermarket expansions for a number of years.
John Lewis has 39,000 employees, 23 department stores and some 120 Waitrose supermarkets.
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