John Lewis, the prestigious British department store chain, is currently undergoing a complete reassessment of its strategy in order to combat the challenges plaguing the retail sector. The high costs of rent and the growing prominence of online shopping have already posed significant difficulties for many retailers, and the Covid-19 pandemic has only exacerbated these issues, resulting in empty storefronts and potential job losses. In response to these challenges, the John Lewis Partnership, which is the parent company of both the John Lewis department store chain and the upscale supermarket Waitrose, has recognized the need to diversify its offerings beyond traditional retail in order to survive.

In a letter to the company’s staff, Chairman Sharon White acknowledged the current hardships and emphasized the advantages of being a Partnership, which allows them to take a long-term perspective and plan for the future. As part of their new strategy, the company intends to expand into various sectors including financial services, gardening, housing, and rental options. They aim to achieve a profit recovery within the next three to five years through these diversified business endeavors.

White specifically pointed out the challenges faced by the retail sector in terms of profit margins and the imperative for the Partnership to establish long-term sustainability. To address this, they plan to substantially expand their financial services division, which currently offers credit cards, insurance, and personal loans. Additionally, they are considering expanding into horticulture, potentially through partnerships in landscaping. The company is also exploring the prospect of collaborating with third parties to develop affordable housing as they reconsider the use of their shop estate. Moreover, they are contemplating the rental of products and the creation of a marketplace for selling used items.

The magnitude of these plans underscores the extent to which British retailers are reassessing their operations in response to the current challenges. John Lewis anticipates that it will become a 60% online retailer, a significant increase from the 40% prior to the pandemic, highlighting the necessity for swift adaptation. Similarly, other retailers such as Marks & Spencer, Boots, and Selfridges are grappling with the need for substantial job cuts as they navigate these turbulent times.

In conclusion, John Lewis is proactively embracing a digital-first approach and venturing into new business sectors to ensure its survival in an increasingly volatile retail environment. By diversifying their offerings and adapting to evolving consumer behaviors, they aim to overcome the challenges they face and emerge as a stronger and more resilient company. Only time will tell if their strategy will ultimately lead to long-term success, but their willingness to adapt and evolve showcases their commitment to overcoming the obstacles confronting the retail industry.

Helpful links:
John Lewis Partnership Chairman’s letter to staff
Retail Gazette: John Lewis Partnership aims to become 60% online retailer