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Defiant chairman defends John Lewis price promise

John lewis oxford street (8)

Sir Charlie Mayfield, chairman of the John Lewis Partnership, has reiterated the retailer’s commitment to its “Never Knowingly Undersold” price promise, despite “unprecedented” levels of promotion on the UK high street.

Charlie mayfield 3x2

Sir Charlie Mayfield

Profit before tax and exceptional items at the John Lewis Partnership, which includes supermarket Waitrose, fell 98.8% to £1.2m for the six months to 28 July. Gross sales across the business rose to 1.6% to £5.5bn for the period. However, department store division John Lewis & Partners made an operating loss of £33.5m, compared with a £33.3m profit last year.

The department store pointed to its price promise, as well as the drop in the value of sterling, new stores and higher IT costs as causes of the slump in profits.

Speaking today following the results, a confident Mayfield said: “We have been never knowingly undersold for nearly 90 years and it is the most comprehensive price promise in the market – no one else has anything quite like it.

“The trust customers have in us because of that promise is extremely valuable and has proven to be so over many years. In times like this, the integrity of that promise is tested, but we can’t be never knowingly undersold in the good times, we have to be able to offer it in the tough times.

“Last year was pretty promotional, but in the first half of this year we’ve seen twice as many [discounting] extravaganza days as there were in the same period last year and the discounts were deeper. These are unprecedented conditions.”

john lewis partners aw18 womenswear look 2 cropped

Mayfield said womenswear has been growing at nearly 5% year on year

Mayfield said that although fashion was one of the areas particularly hit by discounting from high street rivals, womenswear remains a key focus. The retailer unveiled its new own-brand label, John Lewis & Partners, earlier this month.

The 800-piece womenswear collection has been described as John Lewis’s “most significant fashion investment to date”, and features clean, simple styles in bright colours alongside tonal neutrals.

“Looking at our strategy, what we’ve said is that we are going to more different, less comparable than we are today. Half of our offer will be own brand or exclusive to us.

“Womenswear has been growing at nearly 5% year on year and that was even before the recent relaunch of John Lewis womenswear,” Mayfield said.

“In the very early results in the week since the launch, we’ve seen double-digit growth. We must not forget that people have not fallen out of love with shopping. They still want amazing product and incredible service.”

He also stressed that there is still a place for department stores on the high street, despite the current challenges facing House of Fraser and Debenhams: “The talk about whether or not department stores can survive always puzzles me.

“Being a department store does not give us the eternal right to existence, but those department stores that innovate, that change their proposition, move with the times and give customers want they want will thrive and we are determined to be in that position.”

Readers' comments (3)

  • I don’t trust John Lewis. They always seem 20% more expensive than elsewhere. Catching out those who don’t have time to price search. It’s why I stopped shopping there.

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  • It’s an issue for brands I would imagine. John Lewis, due to their price promise, are the biggest discounters in the high street and yet they get a free ride from the industry and press on the issue. No one is forcing them to price match.

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  • The "Never Knowingly Undersold" should be quietly dropped as it is a millstone around their neck. By having that you are attracting the wrong sort of customer (e.g skinners) that JLP could well do without and losing margin to boot.

    I wouldn't agree that they are 20% more expensive as a previous poster said, they just work on SRP's most of the time. They are not the sort of retailer that should be price driven, yet the Price Promise has continually dragged them into unnecessary choppy waters.

    If the consumer is tight or financially disadvantaged, you wouldn't go to John Lewis in the first place, so they should concentrate on the spenders and politely tell the consumer that is looking for a 'price match' that they are free to shop elsewhere.

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