STAFF at Marks & Spencer are reportedly on track to share a £60m bonus pot following an improved performance by the retailer.

The group is expected to confirm this week it has beaten internal performance targets, upon which the bonus is based, during the first half of its financial year, leading to £30m being set aside.

If its profits for the full year hit the £575m to £600m range that analysts have predicted, the bonus pot will be increased to between £50m and £60m, according to a weekend report.

A bonus pool of this size would lead to the group’s 70,000 permanent store staff receiving an average payout of £850 each.

It would be the highest bonus for years and comes after staff failed to qualify for any payout last year, while they received a maximum of only £250 a year earlier.

The group reported a 40 per cent drop in full year profits last year, but its recent trading performance wasthe best for two years in a sign its fortunes may be changing.

M&S reported a smaller-than expected 0.5 per cent decline in like-for-like sales for the 13 weeks to September 26 – a marked improvement on the 1.4 per cent fall in the first quarter.

Analysts are expecting interim pre-tax profits to remain down on a year earlier, at £285m against £297.8m, when the group reports on Wednesday.

But the four per cent fall would be far better than declines seen at the full year stage.

However, a strong performance by the group during the key Christmas period will be crucial if staff are to achieve the maximum bonus payout.

An M&S spokeswoman played down speculation about the bonus and said: “The bonus is based on full year performance and we still have another half year to go.”

She added the bonus was discretionary and not a contractual entitlement.

M&S is currently looking for a chief executive to replace Sir Stuart Rose as chief executive next year.

The relationship between M&S and its shareholders came under strain when Sir Stuart was appointed executive chairman combining the two top roles in breach of corporate best practice.

Another retail bellwether, Next, will give a snapshop of high street trading conditions on Wednesday when it updates sales performance in the 14 weeks to October 31 as it also enjoys a resurgence.

It upped annual profits forecast for the third time in five months in September, as it thanked better ranges and an improvement in consumer confidence.

The group posted a 6.9 per cent hike in interim pre-tax profits to £185.5m after a better-than-expected performance in the six months to July.