Hundreds of staff at Solihull's John Lewis department store have been promised bonuses worth up to a fifth of their salary after helping the retailer notch up big profits.

Sharing in the payout will be thousands of other workers at John Lewis and Waitrose stores around the country. The payout from the John Lewis Partnership, which is co-owned by its employees, is equivalent to more than ten weeks' pay and the biggest as a proportion of wages for a decade.

Karen Lord, managing director of John Lewis Solihull, said the past year year had seen the store "power ahead" in a number of areas, both front-of-house and behind the scenes.

"Partners have faced new challenges with great spirit, and were rewarded with sales up 2.7 per cent on last year," she said. "At our peak in the run up to Christmas, new record sales were set in menswear, womenswear, childrenswear, beauty, china and glass and kitchenware."

The store, which employs 705 people, was recognised for its customer service with an award from the Solihull Chamber of Commerce.

Staff at the store have already been working out how they will spend their windfall.

Call centre worker Vicky Settle is planning to spend some of it on helping a friend who has recently joined a band, Blush UK. The money will go towards marketing the band to raise its profile.

She said: "When she’s rich and famous she can return the favour."

John Lewis Partnership chairman Charlie Mayfield said the record bonus pot of £181.1 million - 18 per cent ahead of last year - was received with "great delight and excitement" by workers across the UK.

However, whether the good results can be maintained is uncertain as Mr Mayfield warned that the partnership network - comprising 26 John Lewis stores and 187 Waitrose supermarkets - faced "very challenging" trading for the rest of this year and possibly into next year.

As with the rest of the retail sector, the continuing credit crunch and squeeze on consumer spending is being blamed as the main obstacle to growth.

Sales at John Lewis have more than halved in the first five weeks of this financial year, with larger home items worst hit amid the housing market slowdown.

Mr Mayfield said: "What we can clearly see now is that some of the turmoil in the banking sector has spilt over into the consumer market. We think conditions will remain tough for most of this year, possibly into 2009."

John Lewis’s profits before partnership bonus and tax for the year ended January 26 were up £59.7 million to £379.8 million. Overall group sales from continuing operations were up 6.3 per cent last year to £6.8 billion.

Waitrose, which contributed the lion’s share of just under £4 billion, saw like-for-like sales rise by 3.6 per cent excluding petrol. Sales at John Lewis, which has an online operation as well as its department stores, grew five per cent on a like-for-like basis to £2.8 billion.

Total sales for the five weeks to March 1 were up two per cent at John Lewis, but eight per cent higher at Waitrose. Online sales are 45 per cent ahead on the year.

Mr Mayfield said the group was set to expand over the next five years, with partner numbers forecast to rise from 69,000 currently to 85,000 by 2013.