Following last year's decline in profits and the extreme challenges created by the Covid-19 pandemic, John Lewis Partnership has outlined new priorities in its strategic review of the business. The review aims to deliver 'green shoots' in performance over the next 9-12 months and rebuild profits over the next three to five years.
Five new priorities
- Driven by purpose: The partnership aims to be 'modern, relevant and inspiring' while staying true to its core principles. The themes of inequality, wellbeing, and sustainable living will be key. These principles will drive commercial decisions and shape employment practices. The updated purpose will influence the services offered to customers and relationships with new commercial partners. This is likely to lead to firmer action on fair pay, working conditions and inclusion and a focus on making it easier for shoppers to shop sustainably, for instance by building on the 'Waitrose Unpacked' trials.
- Simplifying how we work: JLP will take actions to simplify how it works, take out duplication and reduce costs. It is targeting saving at least £100m in head office costs, with more use of technology and outside expertise to meet this target.
- Strengthening retail: Both brands will accelerate their shift online. John Lewis is expected to move from 40% to 60% online while Waitrose will shift from 5% to 20%. Across the partnership the focus will be on making shopping easier and more convenient, investing in store and online, with better rewards for more loyal customers. Waitrose has committed to making its own brand food offer stand out more from the market, with a stronger local offer and more multi-ethnic food. Online, Waitrose plans to ramp up capacity to 250,000 delivery slots per week from 60,000 pre Covid and is well set up to takeover deliveries from Ocado in September. It is also actively exploring the scope to grow other food delivery services outside of its core grocery services. The store network will also be updated, with more Waitrose food shops potentially opening in John Lewis stores to compensate for its limited convenience footprint.
- Expanding into more services: To counter pressured retail margins, JLP is keen to build non-retail revenue streams. Areas of opportunity include financial services, horticulture, private rented housing and building a marketplace to sell 'used' products
- Partnering to grow: JLP wants to partner with other businesses to achieve the above and is already in commercial discussions and looking at acquisitions
JLP will now focus on developing the detail around these priorities and discussing what this means with partners. A further update will follow at the start of September.
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