TESCO’S chairman has defended a decision to stop paying bonuses to shop floor staff, despite continued rewards for the supermarket's executive team.

Speaking at the company's annual general meeting (AGM), John Allan said the new pay plan announced last week provided better stability for shop workers.

"We've actually worked very hard to move our base pay forward," he said.

Under the new plans, basic hourly pay for store and warehouse workers will be raised to £9.30 over the next two years, but the annual bonus for these employees has been scrapped. Meanwhile, chief executive Dave Lewis is set to take home a bonus of £1.6 million this year.

Mr Allan said the new package was more stable for staff, whereas director bonuses would change based on Tesco's financial performance.

He added: “Anyone who currently works for John Lewis will know John Lewis bonuses used to be 15%, now it's about 3%. So they can vary."

Mr Allan also defended the company's move to reduce or remove deli counter services in some branches, which is set to affect around 9,000 jobs.

“We did a major study of each one of our stores with counters," he said. "People are tending to buy less and less from our counters.”

Majestic Wine has plunged to an £8.5 million full-year loss as it closes in on the sale of its retail store business.

The wine merchant said it is in “advanced discussions” to sell the Majestic retail brand and expects to offload it in the summer, amid plans to refocus on its Naked Wines online business.

The retailer slid to an £8.5m loss for the year to April 1, from an £8.3m profit a year earlier, after it was pulled down by an £11.1 million store impairment charge.

Rowan Gormley, group chief executive of Majestic, said multiple bidders have entered the frame to buy the wine warehouse business, amid reported interest from turnaround funds such as OpCapita and Fortress.

The group reported a 6.3% jump in full-year revenues to £506.m, driven by the rapid growth of Naked Wines.

Naked saw sales increase by 14.5% to £178.4m for the period, amid "increased investment" to acquire new customers.

A hedge fund run by veteran activist investor Nelson Peltz has bought a 6% stake worth around £736 million in plumbing group Ferguson.

Trian said it believed Ferguson - previously called Wolseley - was "an attractive business that trades at a discount to comparable US peers" as it snapped up the holding.

It added it has been in contact with Ferguson management and "looks forward to working with them to explore and implement initiatives that it believes can create long-term shareholder value".

Ferguson shares lifted 6% after the announcement.