Huge increase in online shoppers lifts John Lewis

Managing director Andy Street said the company had managed to outperform the market with its festive sales

Simon Neville
Thursday 07 January 2016 02:02
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Managing director Andy Street said John Lewis had outperformed the market with its festive sales
Managing director Andy Street said John Lewis had outperformed the market with its festive sales

John Lewis managed to win over Christmas shoppers thanks to its impressive website, but its sister brand Waitrose failed to entice enough customers to beat last year’s festive sales figures.

The department stores chain enticed fewer shoppers through its doors, with like-for-like shop sales down by 3 per cent, but it was boosted by a 21.4 per cent increase in online volumes. Total sales were up by 6.9 per cent at £951.3m, which was better than anticipated.

Online shopping at John Lewis now accounts for 40 per cent of all sales, despite the introduction of a fee for click-and-collect customers.

Andy Street, the managing director of John Lewis, said: “The obvious online strategy was right and helped with the growth. But you can’t look at each part of the business in isolation because half of all orders are click and collect, so we still need our stores, which should be cherished.”

Mr Street said the level of discounting on high streets in the six weeks to 2 January was highest he had seen. In the week before “Black Friday” on 27 November, John Lewis was forced to revise prices three times as much as usual to remain competitive with rivals under its “Never Knowingly Undersold” pledge.

Despite the unusually warm weather, which dampened sales at rival Next over the festive period, John Lewis saw its fashion business become its second-best department. Mr Street said: “Obviously, the weather affected us but we still outperformed the market.”

Over at Waitrose, sales were less impressive for managing director Mark Price’s final Christmas with the store before he leaves in April. Sales fell by 1.2 per cent to £859.8m, suggesting that either more people were heading to Sainsbury’s, which has been trying to entice Waitrose shoppers by pushing higher-quality goods, or shoppers cut back on extravagances and headed to Aldi and Lidl instead.

George Scott, of retail analyst Conlumino, said: “Waitrose’s relative festive performance won’t become clear until its grocery rivals report on trading, but as a largely outperformer, its figures are certainly reflective of intense market competition which is persisting.”

Waitrose said its trading peak came particularly late and was concentrated on 23 and 24 December, when sales were up 6 per cent and 5.5 per cent, respectively, on 2014.

Neither business would give any details of profits, but their parent company John Lewis Partnership said it expected group profits to be in line with previous guidance of between £270m and £320m – which was lower than in 201

4 because of a £60m pension charge.

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