MORE than 90,000 John Lewis and Waitrose staff will see their staff bonuses cut to 10 per cent of their annual salary after profits fell.

The payout to partners was reduced for the third year in a row after staff were handed 11 per cent last year, 15 per cent the year before and 17 per cent in 2013.

John Lewis Partnership, which is owned by the employees of the two retail chains, reported pre-tax profits before exceptional items of £305.5 million for the year to the end of January 30 2016, down from £342.7 million last year.

The group said the partnership bonus of £145 million was equivalent to five weeks' pay and applied to 91,500 staff.

Department store chain John Lewis saw its operating profit before exceptional items fall by 0.2 per cent to £250.2 million and Waitrose’s operating profits fell by £4.8million to £232.6 million for the full year.

Like-for-like sales at Waitrose, excluding petrol were up 0.4 per cent compared to 1.4 per cent in the 52 weeks before.

Partnership chairman Sir Charlie Mayfield said the group had delivered a ''healthy trading performance'' and bolstered market share despite the challenging trading conditions.

He added: ''Market conditions were challenging through the year with deflation in grocery of -2.6 per cent and subdued demand in non-food.

The group - which has 46 John Lewis stores across the UK and 345 Waitrose shops - said its pre-tax profits before exceptional items had come in line with expectations, but were hit by higher pensions charges caused by market volatility.

However, it revealed a bright start to the year, with gross sales for the first five weeks up 4.2 per cent on the same period last year.

Sir Charlie said: ''Conditions in the market will remain difficult, especially in grocery.