Five things we learned about John Lewis’ fight for survival
Like many incoming bosses, Dame Sharon White promised a sweeping review of her new business when she arrived at John Lewis & Partners in March.
On Thursday, she asked stakeholders to wait until next month for a big unveil of her plan that is meant to stabilise the mutual, which has slashed its staff bonus to zero amid plunging profits.
White has already hinted at some eyebrow-raising measures, including the conversion of excess space in stores into housing and offices.
Nina Bhatia, who was hired in February to lead the review of both Waitrose and John Lewis, insisted there was “no mystery” around the delay.
That followed the company revealing a £635m interim loss owing to a writedown of the value of its retail estate.
Although they largely kept schtum, Dame Sharon’s key lieutenants hinted at the following changes:
Price
John Lewis’ longstanding price pledge Never Knowingly Undersold is already under review. This does not mean the firm will scrap it altogether.
Pippa Wicks, who joined the business five weeks ago from Co-op to run John Lewis, said that “it needs modernising and refreshing”. She emphasised the mutual will focus on “entry level prices” and “value for money” for some of its products.
Christmas
Executives are “cautiously optimistic” about the festive season despite consumer confidence being mellow. John Lewis launched its Christmas shop last month, earlier than ever. Early signs and purchases of baubles and other paraphernalia were encouraging, it said.
Dame Sharon insisted her expectations were not “naive optimism” and shoppers will be keen to celebrate after “what has been a pretty horrid and difficult year”.
Shoppers are likely to have squirreled away some cash they typically would have been spent on holiday abroad, she said.
New Waitrose shops
The partnership made headlines again this week when it said it was closing a further three Waitrose shops and selling one to Tesco.
But James Bailey, who runs the supermarket chain, said: “We are more positive about adding new stores in the near future. Pretty soon you will start to hear us talk about more stores in new postcodes.”
Click-and-collect features heavily in its plans to make the most of both brands and the respective branches. It wants to roll out the proposition to almost 900 locations.
More partnerships and services
John Lewis & Partners has already said it will double-down on tie-ups with other companies. But it is now wondering “how deep it can go”, Wicks said.
It recently started to rent out furniture with help from Fat Llama for items including sofas, coffee tables, desks and bed frames. They rented out all the available items in 48 hours.
Dame Sharon took the opportunity to again categorically rule out a sale of John Lewis or Waitrose as part of her vision for the brands. She said: “We've made it clear that it ’s a red line for us that we will not be selling either brand.”
John Lewis has owned Waitrose since it bought the chain in 1937.
Sofie Willmott, a retail analyst at GlobalData, said: “The retailer has quickly adapted to the rapid changes in shopping habits and replicated many of its in-store services online such as personal and home styling, and beauty and nursery advice, while also ramping up the number of fashion and beauty brands it stocks to improve its product range.”
Loyalty scheme
The mutual said it wanted a joint programme for both brands. Currently they are separate. The move mirrors its efforts to sell more John Lewis products in Waitrose and vice-versa.
Wicks described it as “a big part of our plans”, but declined to say more about how it would work.
