The owner of John Lewis and Waitrose today said it would speed up its transformation over the coming year in order to innovate faster and focus on the competitive difference that its staff make to the business.
The update came as the John Lewis Partnership reported revenue of £4.8bn in the half-year to July 27 2019. That’s 1.4% down on the same time last year. Losses before tax, one-off costs and accounting standard changes came in at £25.9m, down from a profit of £0.8m last year. Pre-tax profits after exceptional income and accounting changes came in at £191.5m from £6m a year earlier.
“The redrawing of the UK retail landscape continues apace,” said Sir Charlie Mayfield, chairman of the John Lewis Partnership, which owns department store John Lewis, an Elite retailer in IRUK Top500 research, and Top50 supermarket Waitrose. Mayfield added: “As we continue with our strategy to compete through differentiation, not scale, we have maintained investment in partners and innovation, despite profit pressures and have seen encouraging results in several areas.” John Lewis fashion (own-brand womenswear +5.7%) and beauty (+8.6%) sales grew thanks to investments in redesigning its own brands, offering new advice services and personalised shopping experiences. At Waitrose, online grocery sales were 10.7% ahead of last time, while like-for-like sales across all channels saw a marginal decline. The Waitrose Unwrapped initiative to cut packaging had also given shoppers new ways of buying from it.
The retail group said it expected the effect of any no-deal Brexit to have a “significant” effect that it would not be able to mitigate. “In readiness, we have ensured our financial resilience and taken steps to increase our foreign currency hedging, to build stock where that is sensible, and to improve customs readiness,” it said in today’s half-year report. “However, Brexit continues to weigh on consumer sentiment at a crucial time for the sector as we enter the peak trading period.”
John Lewis shoppers can now return online purchases to Waitrose delivery drivers, while the retailer is also expanding its click and collect network to branches of the Co-op and of Booths. By the end of October, shoppers will be able to pick up goods in 50 branches of the Co-op.
Waitrose aims to treble the size of its online grocery business to £1bn turnover in the next three years. This spring it set out plans to explore automated online fulfilment in partnership with Today Development Partners but today it said it had decided not to continue that relationship but would look to use in-house expertise.
Differentiation through staff
The partnership has so far trained 2,000 members of staff through a Waitrose School of Food and plans to train a further 2,000 as part of its strategy to compete through the service it offers. It is also developing a John Lewis Service Academy and expanding its apprenticeship programme. It has also taken more than 7,500 staff through leadership development. “Partners play an important role in our differentiation strategy and empowering them so that they are able to create more value for our business is a priority,” said Mayfield.
John Lewis is to expand its personal styling services to men, starting at its Oxford Street, London flagship store. In October it will launch a World of Design centre in its Peterborough shop, putting home stylists into its home departments. “We will also explore how shops can become ever more meaningful in our customers’ lives as partner-led services and immersive experiences from both our brands will take centre stage on every floor in a new concept in Southampton from November onwards,” said the partnership in today’s half-year statement.
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