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John Lewis managing director hits back at discount strategies

John Lewis managing director Andy Street has hit back at the recent raft of high street promotions and says brands and retailers should focus on their long term reputations, rather than resort to short-term discounting.

In a letter to The Daily Telegraph published on its website today, Andy Street said that although every retailer was battling for market share, the situation isn’t apocalyptic and retailers needed to stay strong.

In a letter that echoed comments made by Next chief executive Simon Wolfson last week, Street said: “Consumers are feeling bewildered and bombarded by messages about discounting. This can definitely drive sales on one day but is a short-term approach which can ultimately lead to mistrust in the brand as customers expect prices to be competitive at all times, not just sporadically.”

He has also fought back at John Lewis’ dwindling sales figures, down 9% for October compared to the previous year, saying that they should be put into context. Last week John Lewis saw department store sales fall back 13%.

Street said: “Last year was a record year for John Lewis along with a number of other retailers so it is not surprising that given everything that is happening in the wider economy we are fighting to match those figures.”

Street said the John Lewis Never Knowingly Undersold pricing strategy, helped its customers trust the brand in the long term.

He said: “We have done this for over 80 years and it is a long-standing principles such as this that strengthen a brand and determine which retailers can emerge from the downturn stronger.”

His words come after a week of heavy discounting among the big high street names, including Marks & Spencer and Debenhams.

Street said: “In these incredibly competitive times being a Christmas ‘winner’ or ‘loser’ doesn’t just mean doing well or doing badly. Being a winner means keeping customers every day, not just on a 20% off day.”

Readers' comments (3)

  • I totally agree. prices cannot be driven down any more. the only people that are going to benefit are the chinese factory owners and the logistics companies. What happened to quality!

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  • I agree with Andy Street that the discounting strategy of some of the major retailers over the past week is not the correct way to proceed. A customer is not just for Christmas. What happens after Christmas? The majority of retailers should not be concerned with discount pricing strategy as there are players in the market who are already there-their businesses are geared to this-I feel these are knee jerk times and it is important that retailers who are perceived to have a strong product and more importantly service driven approaches should not fall into the trap of reducing prices dramatically. Having spent my early career in Blue Chip retailing and then owning two of my own businesses I have learnt very quickly that in times of uncertainty however they have manifested themselves that some decisions are best taken at on the shopfloor. As everybody is aware it is very important to keep brand identity and consistency of approach however big retailers could do a lot worse than passing down some of the marketing budget to its stores so that local decisions can be made by the people running the stores. Reacting locally and swiftly - not by cutting prices but by driving service through different channels-it's called customer loyalty!
    Nick Hartshorne-Evans
    Nicholas Jones Bespoke

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  • what a wise man. how refreshing to hear a multiple think like a customer service based indie. I know which high street store I will shop at in future. well done john lewis for being so strong.

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