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John Lewis Partnership contemplates a mixed Christmas

9 Jan 2020 / By: Anusha Couttigane

The John Lewis Partnership, comprising both John Lewis and premium grocer Waitrose, posted a gross sales decline of -1.8% YoY for Christmas, to GBP2.17 billion. While Waitrose & Partners’ decline was mostly due to store closures, resulting in an LFL increase of 0.4%, John Lewis & Partners suffered an LFL decline of -2% (-2.3% on a gross sales basis).

In the wake of these results, John Lewis has also announced the departure of managing director Paula Nickolds, after 25 years of service to JLP.

John Lewis hostage to its price promise

Diving into the detail, John Lewis delivered a strong performance in beauty, with growth of 4.7% putting it “comfortably ahead of the market”. Yet in fashion the business just about kept its head above water, with growth of 0.1%. 

There was also a trade-off between the different categories. Looking at its weekly results, at times the retailer cited a shift in interest from fashion to beauty. This impacted fashion sales from week to week, and the boost to beauty and wellness was simply not enough to make up the difference, particularly as the retailer also sought to price match against rivals in this category.

Conversely, Home and Technology sales were both down. This was directly related to consumer behaviour around Black Friday, when sales were up 10%, with the retailer struggling to maintain momentum following the event.

As we know, many consumers hold off on big ticket purchases until the Black Friday period, with shoppers flocking to John Lewis for its renowned price match promise. However, this has had a noticeable horn effect on the rest of the period, with subdued demand in the run-up to Christmas compounding the retailer’s investment in competitive pricing.

Waitrose sees strong online growth

In food, Waitrose & Partners highlighted “encouraging progress” against its goals, particularly online, where sales grew by 23.4% and basket sizes ballooned in the seven days to Christmas.

This indicates that Waitrose was one of the key beneficiaries of the sharp rise in traffic to grocery stores just preceding Christmas, as Kantar data shows that Monday 23 December was the busiest shopping day of 2019. It also indicates the importance of being able to fulfil orders to extremely tight deadlines as consumers become increasingly demanding around the festive period.

Additionally, John Lewis needs to continue evolving its digital marketing efforts. While the company’s Christmas mascot, the accident-prone dragon Excitable Edgar, was warmly received, the debut of the brand’s Christmas advert is simply not the event it once was.

In the digital age of streaming and on-the-go entertainment, gone are the days of a prime-time TV debut going viral (historically during Downton Abbey or some other national favourite). The retailer needs to ensure it is positioning itself to reach its biggest opportunity customers through the right channels.

Overall, the future of the John Lewis Partnership remains uncertain, with the business undergoing a complete structural overhaul. The departure of Nickolds follows the resignation of Waitrose MD Rob Collins in October last year.

While once upon a time the business was managed through three separate executive boards (one for Waitrose, one for John Lewis and one for the partnership), this is now being merged into a single executive leadership team. The exit of JLP lifers and a disappointing Christmas performance mean that the partnership may neglect to pay out its famous staff bonus for the first time in 67 years. Last year, it paid out just 3%, down from an enviable 18% in 2011.


Anusha Couttigane

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