John Lewis has lots of new money-spinning ideas these days from renting flats to selling home insurance and even landscaping gardens, but what about the old-fashioned way, by running its department stores well?
In a highly critical note published this month an influential retail analyst Steve Dresser suggested that Britain’s favourite department store chain was on a “burning platform” after finding one of its shops in a woeful state, trying to shift a bric-a-brac of old Christmas and Easter stock, including £60 candles in torn boxes and a £95 essential oil diffuser covered in grimy fingerprints.
“Even if you can blame the lockdown how can you justify still trying to charge £16.50 for a chocolate Advent calendar in June?” asked Dresser who said management needed to “get out of the bubble and into stores”.
John Lewis is losing its way, said Dresser, pointing to the “abject retailing” standards discovered on a tour of its relatively new store in Leeds. Although it was “just one store, it’s one store too many”, he said. They should “stick to the knitting” because “anything else takes the focus from the core business and that badly needs more time and expertise, not less”.
The employee-owned group, which also owns Waitrose, tumbled to its first ever annual loss in 2020. The big shopping changes caused by the pandemic prompted it to close 16 of its 50 stores and commit to spending £800m to overhaul the remaining branches, as well as improve its website and shopping app. The crisis meant staff did not get a bonus for the first time in 67 years with one also unlikely this year.
Pippa Wicks, the former management consultant who took charge of John Lewis last summer, bats away the criticism and says John Lewis is actually getting its “mojo” back. She has visited 18 of its 34 stores in the past six weeks and said any problems were likely to have stemmed from a rapid turnaround when lockdown ended.
“These stores shut on 22 December and opened again on the 12th of April and everybody had two and a half weeks to get ready,” she explained. “In the stores I visited, the partners had done an absolutely extraordinary job.”
Dresser also highlighted stock issues on its website, notably in areas suich as garden furniture at the moment. However, Wicks said all retailers were grappling with Covid stock shortages. “The availability issues we’re seeing are industry-wide. I’m really, really proud of what our store partners have done to be in as good a shape as they are frankly.”
When John Lewis’s stores reopened in the spring, shoppers were greeted with new low-price brand, Anyday. The label, which spans 2,400 products from a £1 wooden spoon to a £530 wardrobe, replaces its cheapest own-brand merchandise with prices cut by an average 20%. A further 1,000 products are to be added, including clothing basics, to the Anyday range which is to be sold in Waitrose.
But Dresser was not impressed by Anyday either, describing the brand as “confusing” with prices that still looked high. A pack of nine tealights costs £4, a sum which would buy three times as many in Ikea while the cheapest cot is £70 versus £40 in the rival store.
“What problem is the brand solving?” asked Dresser. “Are people going to John Lewis to save money? No, they’re going for an experience and to be looked after with quality product, with partners that care and shops that are moderately well presented and offer an element of idealism.”
In John Lewis’s gleaming flagship on Oxford Street in central London it is hard to miss Anyday due to the giant orange signs plastered all over the walls. The stencilled logo aims to reinforce its value credentials and for good measure the slogan promises “quality you’d expect at prices you wouldn’t”.
John Lewis is agonising over how to replace its “never knowingly undersold” price promise. Retail analysts argue the guarantee, which does not extend to online-only retailers, has become irrelevant given 60% of John Lewis’s own business will soon be on the web. In this context the Anyday range is supposed to hark back to one of the company’s original tenets of “offering value for money” and since its launch two months ago John Lewis has rung up £20m of sales.
After a miserable year Wicks said Anyday, with its bright orange colour scheme, was bold and modern and had proved a hit with the customers. It would use the same approach to revamp its mid- and top-priced product ranges. “I’m not one for having dust under my feet when we’re trying to take businesses forward.”
Running his eye over the colourful displays of Anyday home furnishings in the Oxford Street store, GlobalData analyst Patrick O’Brien said it was tough to launch a value brand across so many different product areas.
But with John Lewis under attack from cheaper high street and online brands ranging from Dunelm and Ikea to B&M it “had to do something” he says. “Austerity opened the door to discount retailing in the UK and these brands have since become mainstream, attracting middle-class shoppers, and this makes John Lewis vulnerable.”
O’Brien thought the store was in good order but with a £595 crystal chandelier twinkling from the store ceiling near a £30 budget lamp it had to be. “You are playing at a different level here. If you want to get people to spend this sort of money you have got to maintain a store to high standards.
“There is no sense of excitement but it is competent and safe, and for a certain shopper that is what they expect from John Lewis.”
John Lewis has stopped publishing its weekly sales figures so followers of the company will have to wait until the autumn for an update. Wicks sounds certain that, unlike Debenhams, John Lewis is not a doomed franchise. “I sound positive because trading is good,” she says. “We’re back and we’re going to be joyful and bold.”