Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The bosses of John Lewis and Waitrose have promised staff that they will prioritise retail as they press on with their turnaround of the lossmaking group.
Departing chair Dame Sharon White and chief executive Nish Kankiwala told employees at the UK’s largest employee-owned company in November they had to operate under a “one retail mindset”, whether it was Waitrose and John Lewis or its financial services and build-to-rent divisions.
“At the heart of what we want to do, we want to be a brilliant retailer that delights our customer . . . That is the strategy . . . and that’s what we’re really going to focus on, day in, day out, everywhere we go,” Kankiwala said, according to the retailer’s internal magazine seen by the Financial Times. Staff will be presented with a fuller plan “in January or February”,
The updated strategy will centre around four pillars — “We will be Distinctively Us, The Partner Difference, Simple and Productive, and Fix the Basics” — that are meant to improve interactions with customers, further simplify the business and increase productivity.
Since White joined the mutual in 2020 from media regulator Ofcom, she has set out to substantially increase the profits the group makes from financial services and building rental homes on its property, in a move away from its core retail business amid increased competition in the sector.
The Financial Times revealed in September that workers at Waitrose were at risk of losing their jobs if they did not agree to work more flexible hours to boost productivity and keep costs down.
John Lewis typically posts its annual results in March for the year to January. The company warned in September that it would take two more years to complete a turnaround as it posted a loss before tax of £57.3mn in the six months to July 29.
Kankiwala, who was appointed in March as its first chief executive, told staff: “We don’t really want to be copying somebody else, or being a second version of something . . . the [new] strategy and plan is a partnership plan. It’s not a PLC plan or a private equity plan.”
John Lewis’s back to basics strategy is similar to that of Marks and Spencer, which has made notable progress with its turnaround efforts in recent years after decades of false dawns.
Kankiwala said the senior team would manage the company “as an independent partnership with greater cash generation, but we will be a partnership”, signalling that the employee-owned model would remain intact.
Earlier this year White had explored selling a minority stake in the business to raise cash. The plan, which was subsequently shelved, was met with fierce resistance internally as it threatened to erode the company’s unusual structure, and it was publicly criticised by high-profile stakeholders including former John Lewis boss Andy Street who said it would be a “tragedy” if the company were to change its model.
In October, White announced she would step down by February 2025, her five-year tenure making her the shortest-serving chair in the mutual’s history. John Lewis Partnership declined to comment.
