John Lewis to lower its prices in big online push

THE new boss of John Lewis and Waitrose has formally launched a “bold” plan to revive the retailer by selling far more online at lower prices in an attempt to achieve £400m in profits over the next five years.

Under the leadership of Dame Sharon White, the department store chain will replace its “Never Knowingly Undersold” price promise with a new scheme next year.

It said there will be “new entry price points on all categories” as shoppers increasingly hunt for bargains.

The employee- owned partnership also aims to double down on affordable housing and financial services, as well as branching out into garden centres. It plans for almost half its profits to come from non-retail by 2030.

Nina Bhatia, the director of strategy, stressed that the two businesses should make

“sufficient, not maximum, profit” and have a green, sustainable agenda, in line with traditional John Lewis values. Its unique structure makes it difficult to raise cash by selling shares or securing external investment.

Dame Sharon, chairman of the mutual, said: “We’ve seen five years of change in the past five months … our plan means the partnership will thrive for the next century, as it has the last.”

John Lewis declined to say if there will be more j ob losses or store closures as it plans to save £300m a year by 2022 by simplifying the business and reviewing agreements with suppliers.

John Lewis aims to pay a bonus again when profits exceed £150m. It scrapped the staff bonus after posting a first-half loss of £635m last month, but the second half that includes Christmas is usually the most profitable.

The partnership will invest £1bn in online and to improve shops over the next five years. The plan is for the department store chain to generate up to 70pc of its revenues from its website.

Sister business Waitrose, which enjoyed a boost from the surge in home deliveries since the pandemic, will expand delivery capacity beyond 250,000 orders per week, up from 55,000 before the pandemic.

J ohn Lewis will also become a major landlord, aiming to build rental homes at 20 sites either above or beside stores or on other land it owns. It has earmarked two sites in Greater London.

‘Our plan means the partnership will thrive for the next century’

Tim Martin is angry. What’s new, you might say? Whether it’s Brussels, suffocating corporate governance, or, more lately, the pandemic, the boss of JD Wetherspoon often sounds like a man on his third pint. Outbursts are what he does, and in some ways the world is a more lively, colourful place for them.

That’s particularly true in the fusty upper echelons of business. Most chief executives these days have been media-trained to within an inch of their life to say nothing unless it’s on a carefully crafted script in front of them. Still, Martin’s not always right, and he gets it wrong again in the pub operator’s annual results with an unnecessary and ill-founded attack on the media.

But on the Government’s restrictions he has every right to be angry, and not just because Wetherspoon has reported a fall in turnover of a third, alongside a thumping £100m loss for the year to the end of June, the first time it has slumped into the red in more than three-and-a-half decades.

That’s already ancient history though. A bigger concern will be how its pubs have performed since reopening after lockdown. Answer: reasonably well, until a new wave of restrictions was brought in, leaving sales 15pc below last year in the 11 weeks since the end of July. That’s worse than Marston’s, which yesterday reported a 10pc shortfall over a similar time frame, probably because

Wetherspoon pubs tend to be in city centres, whereas its rival is more heavily concentrated in the suburbs.

Martin is also swinging the axe, though not nearly as heavily. Some 100 jobs are going at head office, plus 450, already announced, at its airport sites, further underlining the impression that Marston’s has gone too far with 2,150 redundancies. But like his competitors, Wetherspoon’s founder and long-standing proprietor lays the blame for the industry’s woes squarely at the door of ministers. As he points out, pubs actually recovered pretty quickly from lockdown as people burst out of their front doors desperate for a pint with friends.

Not only that but pub landlords invested millions – £13m in the case of Wetherspoon – to Covid-proof their premises, only for the Government to panic and introduce another load of measures like the 10pm curfew and table service that have further stifled trade. A sector that was “getting back on its feet” has since experienced a “marked slowdown”, Martin says.

And with what justification? Martin is certainly no epidemiologist. For a start you wouldn’t be allowed in a laboratory with a mullet like that but he’s right to complain that pubs are grappling with “an ever-changing raft of ill-thought-out regulations” without “any obvious basis in science”.

He’s also right to highlight that an infection rate of 1pc among employees is roughly in line with the national average, so why have pubs been singled out? As a consequence of the new rules, Martin says the outlook for the rest of the year “is even more unpredictable”, a grim assessment that wiped an eye-watering 10pc of the shares in morning trading.

Pass the hard stuff.

Storing up trouble

No one can accuse Sharon White of resting on her laurels at John Lewis. The former Ofcom boss is absolutely going for it as she attempts to turn around the illustrious retailer.

After months of brainstorming that risked ending in a giant dart-throwing contest, White looks to have arrived at something resembling a coherent strategy. With the awkward decisions about cost cuts out of the way, she can now get on with trying to transform John Lewis from tired department store chain into a digital powerhouse fit for the 21st century.

It won’t be an easy task. Covid has put a rocket under online shopping, leaving John Lewis labouring badly on that front. However a commitment to invest £1bn over the next five years in ramping up click and collect across 1,000 locations, and increasing Waitrose delivery slots to 250,000 a week from 55,000 before the pandemic, shows she means business.

The big question is whether there are still too many stores. For the modern retailer, it’s an almost impossible balance to strike, but the answer is usually yes. There’s a sentimentality about bricks and mortar that makes it hard to let go.

‘A sector that was “getting back on its feet” has now experienced “a marked slowdown”’