Bonds to 84,000 staff in John Lewis and Waitrose has been cut for the fifth year in a row.
Employees will receive a bonus of 5% instead of 6% last year and the lowest since the 4% is paid in 1954.
Group’s annual profit before partnership bonus, tax and exceptional items, fell 21.9% to Â£289.2 m.
John Lewis Partnership chairman Sir Charlie Mayfield said 2017 was a “difficult year”, as expected, with “subdued” consumer demand.
He said that the weakness of sterling had led to an increase in costs, putting pressure on the business’s profit margin.
The association said that it had been hit by exceptional costs of Â£111.3 m, including Â£72.8 m on the restructuring and redundancy costs, mainly in relation to the brand, the distribution and retail operations.
“This was the reason why we chose to reduce the proportion of earnings paid from the association bonus in the past year, as well as to absorb these impacts, while continuing to invest in the future and in the strengthening of our balance sheet,” Mr. Charlie said.
He said that the company remains committed to increasing the rates of pay for non-management staff, and that the average hourly wage for a non-management workers was Â£8.91.”Volatile” year ahead
Like sales – which strip out the impact of store openings – in the John Lewis department stores were up 0.4%. At Waitrose, sales returned to growth, as sales increased 0.9%.
Gross sales for the full year of the period were up 2% at Â£ 11.6 million euros.
“We expect trading to be volatile in 2018-19, with the continuing economic uncertainty and no let up in competitive intensity. Therefore, to provide a greater pressure on earnings,” the company said.
The redundancy payments it costs Â£72.8 m in 2017. The association said 1,440 members of staff had left the business through the redundancy in the past year.Analysis: Emma Simpson, BBC business correspondent
John Lewis is owned by its staff and they appreciate your annual bonus. It is the fifth year in a row, but given the difficult conditions on the Street right now, some of the partners may feel grateful for any extra payment.
John Lewis remains one of the stronger players. The current figures show that even this name of the house is not immune to the forces that affect the industry.
It warned in January of 2017, which would reduce the bond order to prepare for more tough trading conditions ahead. That seems to have been a prudent move. But the relentless pressure on profits, shows no signs of accelerating this year. ‘Traps’
The company said its stores John Lewis had increased market share in fashion, household goods, electrical appliances and home technology, with sales in the last category, which is 2.6%.
Fashion sales were up 3.2%, driven by strong performance in women’s clothing, up to 5.0%. The sales of its own brand of womenswear increased by 14.9%.
But, items for the home sales decreased by 0.8%, with soft demand in categories such as furniture, wardrobes, fitted kitchen floor and upholstery.
“These results show that the conditions of the Street are very difficult at the time,” said Richard Lim, chief executive of analysts in the Retail market of the Economy.
“Consumer spending, in general, is much more soft, while inflation remains close to five years.”
He said that the research for the study showed that consumers were also concerned about Brexit and its own low levels of personal savings. “The people of personal finances are under pressure.”
Mr Lim said that in the next year, John Lewis would be looking very closely at their costs and the ways to potentially bring these down.
“That could mean looking at the use of their existing spaces more efficiently, and innovative.”How does the John Lewis Partnership work?
John Lewis has been a partnership since it began 150 years ago
Waitrose joined in the year 1937
It consists of an elected council, a board of directors and a president
First bonus paid in 1919
First cash bonus in 1970
Any bonus paid in the First World War, Second World War and the beginning of the decade of 1950
The company says that its business structure allows it to have a longer-term perspective, because they do not have to answer to the shareholders of the City