LONDON, March 7 (Reuters) - Britain's John Lewis Partnershipsaid it expected 2019 to remain challenging after itreported a 45 percent drop in full-year profit, dragged down bythe "near constant discounting" of its department store rivals.
The employee-owned business, which runs the country'spremier department store chain and the up-market Waitrosesupermarket, warned on profit last June after being forced tomatch the aggressive tactics of its rivals as they fought forsurvival.
It said on Thursday that profit before tax and one off itemsfell to 160 million pounds ($212 million) in the year to Jan. 262018, down from 292.8 million pounds made in 2017-18.
As a result it will pay its workers, which it callspartners, a bonus of 3 percent of salary. It paid 5 percent lastyear - the lowest since 1954.
"In line with expectations set out in June, our Partnershipprofits before exceptionals have finished substantially lower inwhat has been a challenging year, particularly in non-food,"Chairman Charlie Mayfield said in a statement.
Britain's department store sector has been under intensepressure from weak demand and rising costs for several years.
BHS went bust in 2016, House of Fraser was bought out ofadministration last year by Mike Ashley's Sports Directand Debenhams has issued a raft of profit warnings andis closing stores.
Last June the John Lewis Partnership refined its strategy,saying it would invest up to 500 million pounds a year, aimingto differentiate its businesses through innovation andservices.
For 2019 the group said it was well prepared for Britain'sdeparture from the European Union, having come up with a planthat covers currency moves, tariffs, customs changes andimplications for labour.
It is concerned that a disorderly departure would hitconsumer confidence. It said it had also built up a strongliquidity position of nearly 1.5 billion pounds so it cancontinue to invest in the business and mitigate any risks.
"Given the current level of uncertainty, we expect 2019trading conditions to remain challenging," it said.
($1 = 0.7595 pounds)(Reporting by James Davey and Kate Holton; editing by AndyBruce and Emelia Sithole-Matarise)
