John Lewis will charge £2 for click-and-collect services on orders under £30 from the end of July.
Current online market practices are “unsustainable”, managing director Andy Street told journalists at the store group’s Christmas preview last night (June 30). The flat rate will apply to the 18% of the group’s ecommerce orders that fall below £30.
In a direct reference to Amazon, which yesterday announced it was going to introduce one-hour deliveries in central London, Street said customers would appreciate that good businesses like John Lewis, that offered fair prices, looked after their staff, operated attractive stores and “dare I say it, pay their taxes”, could not afford to give permanent free deliveries and returns.
“We will be focused on meeting new customers’ expectations,” he added.
He predicted that trading on Black Friday this year (November 28) would be up to 20% bigger than last year, but reiterated his confidence that John Lewis would not let any customers down on deliveries due to expansion of its vast distribution centre in Milton Keynes. He repeated his message that “it will be another logistics Christmas” as “last year’s Christmas issues will only be amplified”.
He said he hoped that John Lewis would outperform the market for the seventh successive year at the festive season, although the growth of the last six years would not be repeated. He would be delighted if John Lewis added between 3% and 5% to sales this year.
Despite the confident and upbeat message, Street admitted that in a “solid start” John Lewis’s sales growth has slowed this year, largely due to a slowdown in big ticket items before the general election.
The previous momentum has not returned – sales for the first 22 weeks of the year are up a modest 2.9% – although he singled out fashion in general and menswear in particular as a category that was performing very well.
Street said he did not believe consumers would splash out more than usual this Christmas as he believed they were still wary of the general economic prospects but he predicted that the upcoming emergency budget would be designed to maintain a feel-good factor rather than emphasising austerity measures.
“Shops remain the core of John Lewis, but their role is changing,” Street stated. Seven new stores have been announced, with the 250,000 sq ft full-line store at Grand Central Birmingham, Street’s home town, the first to open in September 2015. Two other openings to add to Basingstoke, Birmingham, Chelmsford, Leeds, Oxford, Westfield London and Worcester will be announced before the end of the year.
Responding to a question from Drapers, Street confirmed there was no intention of dropping the company’s Never Knowingly Undersold pledge despite the pressures of a discount-obsessed UK market.
“I agree that on occasions the price matching we have to do may be viewed as madness, but across the 350,000 items we stock on John Lewis online, it is the right thing to do and it will remain central to our ethos.”