Store operator John Lewis is awarding staff with a GBP120m bonus after the company notched up 2005 profits of GBP252m (US$434.88m), beating most of its closest competitors.

Pre-tax profit grew 10% during the year, while group sales rose 8% to GBP5.8bn.

The company said it would reward employees with bonuses equivalent to nearly eight weeks' pay.

Chairman Sir Stuart Hampson said: "2005 saw some of the most testing retailing conditions for well over a decade, but our storming performance in the final quarter delivered a strong improvement in sales and profit for the year.

"We achieved it by winning the trust of our shoppers, building close relationships with our suppliers and focusing on delivering quality, value and a better level of service."

Supermarket Waitrose's turnover rose by 13% to GBP3.3bn, as same-stores rose more than 4%. Profits grew 19% to GBP231m.

Department store sales were up 2%, to GBP2.4bn, with profits dipping 6% to GBP192m - but with figures broadly static on an underlying basis.

Hampson added: "We are pleased to announce today the acquisition of five shops which includes two branches in Edinburgh, taking Waitrose into Scotland for the first time.

"Looking ahead, whilst there is every indication that this year will continue to be a tough one and that retailing in 2006 will not be for the faint-hearted, both divisions have made healthy starts to the new trading year. John Lewis sales are 8% ahead for the five weeks and Waitrose is up 9%. I am confident that we can sustain this momentum, and that we have the skill and the stamina to build on last year's firm foundation."