LONDON: John Lewis Partnership, the owner of John Lewis department stores and the Waitrose supermarket chain, has reported a 77% fall in pre-tax profits to £104m after taking into account staff bonuses.

The employee-owned company also reported that staff, who are known as partners, will receive a bonus of just 5% this year, its lowest level in 63 years.

Chairman Sir Charlie Mayfield acknowledged that 2017 had been a “challenging year” of “subdued” consumer demand, with margins squeezed by a Brexit-related fall in the value of the pound.

The retailer also warned of further pressure on profits in the year ahead, the Telegraph reported, as well as “volatile” trading conditions, “continuing economic uncertainty” and intense competition.

John Lewis’s poor end of year results reflect the hard times afflicting the UK retail sector, which is having to cope with weak consumer sentiment as well as currency swings following the UK’s vote to leave the European Union.

And it follows reports that two other major retailers in the UK – Toys R Us and electronics chain Maplin – have been forced into administration.

However, on a more positive note, Charlie Mayfield revealed that John Lewis will seek to improve the situation with more focus on innovation and customer experience.

“We’ll be bringing some bold moves for both our brands over the next 12 months. There’ll be a greater emphasis on partners being at the heart of delivery of real value and experience for customers and there will be more innovation on product and service,” he said in comments reported by Marketing Week.

For example, John Lewis launched its first experiential store in Oxford at the end of last year, and said it would roll out more of these this spring.

There also has been “significant acceleration” of growth online, the company said, with e-commerce sales up 10% compared to 3% growth in-store.

As a result, it is moving all online content onto a responsive platform that will give customers a more “seamless” shopping experience across devices.

Sourced from Telegraph, Marketing Week; additional content by WARC staff