The real John Lewis bonus today was Waitrose

Caution was in no short supply at this morning's breakfast with the bosses of John Lewis Partnership. Over coffee and croissants at its Victoria HQ, the retail giant’s directors echoed worries that the industry as a whole has been voicing for months: namely, the major structural changes on the high street and fears over a no-deal Brexit.

While managing to avoid speculation over who is set to replace him next year, chairman Sir Charlie Mayfield was perfectly clear when it came to the troubles that John Lewis faces: too much space, too little consumer spending and pressure on profit margins as a result of discounting wars. Indeed, such is the sector’s state of doubt over the future that Mayfield admitted yesterday’s announcement of a three per cent bonus – its lowest in 66 years – actually received a cheer of relief from staff that "was louder than when it was 15 per cent".

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But despite the doom and gloom, there was one executive in the room who had reason to be quietly upbeat. Rob Collins, the low-profile managing director of Waitrose, has overseen an 18 per cent rise in operating profits to £203m. A bumper summer and a strong Christmas showing boosted the fortunes of the grocery chain – whose figures, it should be added, also looked better as a result of a particularly turbulent 12 months in the previous year. Nonetheless, amid today’s retail challenges, achieving margin and sales growth warrants praise. Costs were well controlled, like-for-like sales were up and as Collins pointed out today, the average Waitrose basket size was still "nicely north of £100". According to retail analyst Richard Hyman, that success is largely down to Collins investing in "quality, provenance and service".

Yet it is not so much baskets as it is vans that are now in the firm’s thoughts. Ocado’s decision to hook up with M&S and part ways with Waitrose leaves Collins with the tough task of retaining customers for the firm's own delivery service after the break-up goes through next year. There is greater overlap between the Waitrose and Ocado customer bases than those of any other grocers, and according to Kantar more than 40 per cent of Ocado shoppers also visited Waitrose in the 12 weeks to 24 February. For Waitrose, therefore, loyalty is the key to keeping customers after the split.

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Today's results show that over the last 12 months, having a food retailer like Waitrose has provided a bright spot for John Lewis at a time when discretionary spending in its own department stores is crashing. But the question which must now be asked for the next 12 months ahead is: when Waitrose and Ocado divorce, who gets the kids?