John Lewis Partnership is to unveil what its future may look like in its strategic review update out on Friday, which may indicate some wider change in the UK high street.
Its large, city centre-located department stores have taken a bad hit during the pandemic so the partnership ended up closing 50 stores, costing 1,300 jobs.
Waitrose has been a bright spot in an otherwise bleak picture at the staff-owned retailer, but even though sales have soared the grocer had to enforce some permanent closures to cope with the additional costs brought by COVID-19.
The partnership has already signalled the acceleration of online shopping trends so the market will be interested to see how the British high street veteran shifts its focus to meet these challenges.
Chairman Dame Sharon White said John Lewis is expanding its click and collect service, although she defended the role of shops for customers to feel furniture and try clothes on before buying.
“We can’t rule out the possibility of radical measures unveiled to slash store footprint further and refocus the chain for the digital shopping future,” said Susannah Streeter, analyst at Hargreaves Lansdown.
White is also expected to announce a new vision for the existing department stores, which may be converted into housing or move into garden centres.
Patrick O’Brien, UK Retail Research Director at GlobalData, told Proactive he thinks the price promise of Never Knowingly Undersold since 1925 will be ditched.
“It’s been a millstone for quite some time, and hasn’t really stopped consumers thinking of it as an expensive place to shop, and yet it has had to match the heavy discounting by desperate zombie department store competitors on branded goods for some time,” he said.
“It tried to circumnavigate this with a focus on private-label and exclusive product, but it has found in clothing especially, that this has not rescued margins sufficiently.”
“[The department store] will need to find other ways to convince shoppers of its ability to offer best value, if not best price. Re-establishing its carelessly lost customer service leadership would be a good start. Bringing all aspects of customer service that it has outsourced back in-house should be a priority.”
The partnership slumped to a pre-tax loss of £635mln for the half year to July 25 after writing down the value of its stores by £470mln, then ditched the staff bonus for the first time since 1953.