John Lewis Partnership has revealed annual profits tumbled by more than £100 million as the consumer spending slump punished department-store sales.
Bonus payouts for 69,000 staff at the partnership will be slashed after the 26% dive in underlying profits to £279.6 million in the year to January 31.
John Lewis, which is co-owned by its employees, will share out a £125.5 million bonus pot - equivalent to just under seven weeks' pay - down 31% on the previous year.
Like-for-like sales at the department store dropped by 3.4% in the year and John Lewis, which also owns supermarket Waitrose, said it was braced for a "very difficult" 2009.
Trading conditions since its year-end show a worsening picture, with like-for-like sales at the department stores down 8.8% on last year in just five weeks.
Waitrose sales - which proved resilient last year thanks to rampant food price inflation - were also lower in recent trading, down 0.6% on a comparable basis.
The group said: "We expect trading conditions for 2009 to continue to be very tough, with ongoing pressures on consumer spend and low consumer confidence.
"As a result, we anticipate that price competition will be as intense as last year and we are well prepared to meet these challenges."
But the group said it remained committed to expansion plans in spite of recessionary pressures.
It plans to open a further 22 Waitrose shops, extend three stores and hire another 4,000 staff. It will open a new John Lewis store in Cardiff in September and is building a new outlet at the Olympic site in London, although beyond these developments the group admitted growth plans have been delayed.
