Thousands of John Lewis and Waitrose staff will receive the equivalent of seven weeks' extra pay after the upmarket stores chain today reported profits of nearly £280 million for last year.

Although the profits were down by £100 million from the previous year, the 69,000 staff will still get a bonus of 13% in their wage packets.

That was well below the 20% that was paid out last year but still respectable in a year when many of its well-heeled customers have been receiving no bonuses at all.

The partnership had to slash bonuses in order to lower its prices amid stiff competition from rivals in the economic crisis and in keeping with its "never knowingly undersold" pledge.

Chairman Charlie Mayfield said: "It was a very tough year and we met the challenges of the deteriorating conditions. We think 2009 will be another very difficult trading year."

The group, which is owned by its staff in a partnership, has had to delay parts of a major expansion plan unveiled in 2003.

It had intended to create 10 big new stores by 2013, but four of those sites are behind schedule as property developers delay shopping-centre projects.

However, the opening of a store at the Olympic site at Stratford is still scheduled to take place in 2011.

The figures showed John Lewis operating profits fell 27% to £144.4 million while at the 198 Waitrose stores, they slipped 3% to £211.6 million. In terms of sales, the department stores were broadly flat at £2.81 billion while Waitrose gained 5% at £4 billion.

Sales of products such as sofas and homewares had suffered from the housing market slowdown.

Mayfield is thought to be on a salary of about £860,000, which means he is in line for a bonus of about £112,000.

While that may sound a lot, it is considerably less than those of other major retail bosses such as Sir Terry Leahy at Tesco, whose salary last year was £1.3 million.

In London, the group said, its flagship Oxford Street John Lewis store had been trading well despite the increased competition from the new Westfield shopping centre.

Peter Jones in Sloane Square has been seeing big declines in like-for-like sales, however, as its local customer base has suffered badly from the decline in the City and Canary Wharf.