John Lewis’ profits plummet but shake-up to focus on the customer will guide it though turbulence

In apparent anticipation of revealing disappointing results, the past week alone has seen the John Lewis Partnership laud its renewed focus on the customer.

On Tuesday (8 September) John Lewis announced a raft of changes to senior management, a move that managing director Andy Street said will “place the customer at the heart of our decision making”.

A day later its grocery arm, Waitrose, lauded the success and expansion of its new loyalty scheme which it says has put the customer front and centre of the discounting strategy, where other grocers have left them feeling confused and misled.

However, today (10 September) the John Lewis Partnership surprised the industry by revealing a substantial drop in profits, down 26 per cent to just £96m in the six months to 1 August.

Waitrose meanwhile suffered its first loss in seven years as like for like sales fell by 1.3 per cent.

John Lewis believes reviving sales will come down to a renewed focus on omnichannel, with chairman Charlie Mayfield saying “the rapid rate of change in retail is set to continue and therefore the time is right for us to develop the thinking that will help sustain the Partnership in the next generation.”

JLab – its innovation lab – is beginning to produce tangible ideas which could be implemented across the business. Its winner last year, Localz, wants to overhaul the customer experience around click and collect, which will require the backing of new customer director Craig Inglis if it’s to put a stake in the ground for the direction John Lewis is heading in.

For the time being, its marketing efforts will be focused on the Christmas season for which the retailer has become irrevocably associated. Attentions will be turned to Waitrose’s festive output which has seen it work with Adam&Eve DDB – the agency behind John Lewis’ infamous ads – for the first time as the brand looks to hold its ground against the likes of M&S Food.

Mayfield said he expects sales in both Waitrose and John Lewis to perform comparatively well against the market, helped by the “promising new ranges and online capability.”

Get the Newsletter

Keep up to date with the latest news and insights.

Subscribe

Jennifer Faull

Jen Faull is deputy news editor at The Drum with a remit to cover the latest developments in the retail and FMCG sectors. Based in London, she has interviewed major business figures including top marketers from Mondelez, Unilever, Tesco, and Lidl.

All by Jennifer