M&S set to slash staff bonuses despite profits rise

Retail giant Marks & Spencer is expected to slash bonuses for around 75,000 of its UK staff today despite posting its highest annual profits for a decade.

London City experts predict the bonus will be a fraction of last year’s record £91m (€114m) payout as the retailer comes to terms with consumer belt-tightening.

Weekend reports suggested the firm could post £1bn (€1.3bn) in pre-tax profits for the first time since 1998, but analysts say the landmark will only be achieved at the expense of the staff pot.

“We think M&S will only make £1bn if the staff bonus is slashed completely,” Pali International’s Nick Bubb said.

According to consensus forecasts from the company, M&S should make around £989m (€1.2m) in pre-tax profits for the 12 months to March 31, around 2.5% ahead of the previous year.

However, chief executive Stuart Rose – whose total bonus topped £2.6m (€3.3m) last year – is likely to offer more gloom over trading prospects after the firm shocked markets in January with its first fall in like-for-like sales for nine quarters.

“A better May so far in food and in clothing won’t have offset the terrible April that M&S suffered and at this stage, given the structural and cyclical pressures on the UK business, we expect Stuart Rose to take a glass half-empty view of the world,” Mr Bubb added.

Shares in the group reached highs above 750p last year but have fallen by almost half to near the 400p mark as a spending squeeze hammers retailers.