DEPARTMENT store group John Lewis has pegged back bonuses for its 57,000 staff after seeing bottom-line annual profits fall for the fourth year in a row.

The department store group will offer staff nine per cent of their annual salary - down from ten per cent last year and sharply lower than the 22 per cent seen in 1998.

The bonus - equivalent to one month's pay - comes after headline profits fell five per cent to £141m in the year to January 26.

John Lewis, which owns the Bainbridge store in Newcastle, blamed the fall on higher investment in e-commerce operations and said the performance of its frontline businesses had been strong.

Bainbridge, founded in 1838, is set to lose its identity in June when it becomes John Lewis Newcastle as part of a £300m rebranding scheme.

Profits from core retail operations, including supermarket chain Waitrose, rose 13 per cent to £173m with group sales up eight per cent to £4.46bn.

Chairman, Sir Stuart Hampson, said he was buoyed by the performance of the mainstream businesses, which reversed a three-year trend of reduced profits.

He added: "We've made real headway on many fronts, but we recognise that there is more to do if we are to get the most out of the changes we have introduced."

Waitrose was the driving force behind the growth, with sales increasing ten per cent to £2.3bn. Department store sales also broke the £2bn barrier, gaining six per cent.