LONDON (Reuters) - Britain's John Lewis Partnership cut its staff bonus for a fifth consecutive year as 2016-17 trading profit at both its department stores and Waitrose supermarkets fell, it said on Thursday.
Trading for the year ahead would be pressured by intense competition in the retail sector, rising input cost inflation, and the continued move to online from instore shopping, it said.
Consumers have reined in their spending as inflation rises after last year's Brexit vote, unexpectedly hitting retail sales at the start of the year.
John Lewis said it expected "both inflationary cost pressures and competition to intensify in the market as a whole."
The employee-owned group said its staff, known as partners, would receive a bonus of 6 percent, equivalent to over three weeks pay, down from 10 percent last year. It totals 89.4 million pounds.
The percentage payout was the lowest since 1954 when 4 percent was paid.
John Lewis cautioned in January that the bonus was likely to be "significantly lower" this year due to the need to invest heavily in its online business as well as import cost pressures from a weaker pound since last June's Brexit vote.
Chairman Charlie Mayfield said that the bonus was lower because the board wanted to strengthen its balance sheet.
"This allows us to maintain our level of investment in the face of what we expect to be an increasingly uncertain market this year," Mayfield said.
The group said profit before the partnership bonus, tax and exceptional items increased 21.2 percent to 370.4 million pounds. However, a large part of this profit increase was due to lower pension accounting charges.
There were also a number of exceptional items in the results. After including these exceptional items, the operating profit in both Waitrose and John Lewis department stores was below last year.
Last month the department stores business said it would cut hundreds of jobs in a reorganisation of its soft furnishings business and changes to the way it operates its in-store restaurants.
($1 = 0.8233 pounds)