Online revolt lifts John Lewis
THE online revolution transforming British shopping habits sparked a record rise in internet sales for department store John Lewis.
The High Street giant yesterday revealed how online sales accounted for 40pc of total revenues over the crucial Christmas trading period.
While its web sales soared by more than 21pc, those made in stores fell by 1.2pc in the six weeks to January 2.
This digital phenomenon has stunned the big high street names in recent weeks and illustrates why Sainsbury’s made its surprise attempt to snap up Argos, whose owner Home Retail Group is recognised as having some of the leading technology for home deliveries.
The shift to online sales has been accentuated by the recent heavy rainfall across the UK that convinced many shoppers to stay indoors. Earlier in the year, fear of terrorist attacks following the shootings in France also persuaded many shoppers to use the web instead.
Analysts say that many who had previously been put off using internet shopping had found that the experience was much better than expected and, as a result, many were now converts.
But despite John Lewis’s growth in online sales, managing director Andy Street said stores would always play a major part in the firm’s strategy.
‘We would not have had these online sales without our shops,’ he said. ‘The obituary for shops is premature. Shoppers like to come into our shops to speak to assistants and often then go home to make their orders online.
‘Our stores were very busy before Black Friday with customers getting an idea of what the deals would be before then making their purchases from our website. We’ve always said we are best at bringing shops and online together.’
But Street also repeated his concern that tax avoidance by online retail giant Amazon will drive UK companies out of business. He said: ‘Over time this is likely to mean that British companies, paying British taxes, are disadvantaged.’
Fashion was the star performer for John Lewis during the festive period, helping to lift total sales 6.9pc to £951.3m. But it also saw a change in the pattern of trading.
In the past there had been a gradual build-up in demand as Christmas Day approached, but this year trading spiked on three occasions: Black Friday, Christmas and the January clearance sale. The retailer cherry-picked discounts for specific categories at different times, releasing deals on fashion and technology for Black Friday and homeware after Christmas.
Five products per second were being sent out from its warehouses at peak time on the Black Friday weekend – an increase of 18pc on the previous year. Sales made on mobile phones and tablets grew bya 31pc compared to the same period last year.
Orders made through its Click & Collect service rose 16pc.
Post-Christmas sales from shops increased 16.2pc in the first week of the clearance sale.
Waitrose, part of the John Lewis Partnership, did not fare so well, as sales fell to their lowest level in seven years.
The upmarket grocer posted a 1.4pc drop in sales for the six weeks to January 2. But it did see strong online growth, with grocery sales up 7.9pc, and sales over the Christmas and New Year weeks were up 9.8pc.
Sales through some of Waitrose’s specialist websites, including wines, hampers, flowers and kitchen gadgets, grew by 28.1pc.
At the broader John Lewis Partnership, total sales were up 4.1pc to £1.8bn, compared to the same period last year.
It remains on course to post a profit of between £270m and £320m versus £342.7m the previous year.