John Lewis & Partners has no plans to ditch its ”never knowingly undersold” price matching strategy despite increased Christmas discounting on the high street, managing director Paula Nickolds reiterated today.
The company came under fire for its unwavering commitment to the promise in September amid ”unprecedented” levels of promotion on the UK high street.
“We have no plans to remove it. It’s about trust and it needs to stand up in good times and in bad,” said Nickolds. “It’s a very important part of our commitment to our customers, and played an important part in the results we shared today.”
Gross sales at the John Lewis Partnership, which includes Waitrose & Partners, were up 1.4% to £2.2bn for the seven weeks to 5 January.
However, the company warned that staff may miss out on annual bonuses as full-year profits are expected to be “substantially lower” than the previous year, with gross margins remaining under pressure “in what was an intensely competitive pricing environment”.
“Never knowingly undersold is a responsive promise,” Nickolds maintained. “Ultimately every retailer will be looking to set their prices as competitively as possible and we are very confident off the back of our Christmas performance.”
The final decision on bonus payments will be made in March.
The partnership’s chairman, Sir Charlie Mayfield, said: ”We saw about 5% increase in the average pay of non-management partners last year and what we’re committed to is paying really well and increasing that.”
”Bonus is very important, and I’m not understating that, but it’s just one feature of the total partnership proposition.”
Fashion performed well over Christmas thanks to strong sales of John Lewis’s own brands, which include Modern Rarity, And/Or, and John Lewis & Partners.
Nickolds said: “Total fashion sales were up by 6.8% and womenswear was a star within that. We’re seeing more emphasis on products that are unique and targeted at our customer, and represent something different.
“You’ll see that continue with all of our own collections in the coming year.”
In such a tough market, Mayfield stressed the importance of “competing through people” and the service provided in store.
“In a world where everything is within reach there is a tendency to think about retail in a rather transactional way,” he said. “However, it’s not as if we’ve changed from being people and the difference you can make from having really well qualified good service in a relatable way is important.”
The partnership rebranded in September to add “& Partners” to the John Lewis and Waitrose names – a move Nickolds said “wasn’t just an exercise in changing the colour or logo but place important emphasis on what John Lewis stands for”.
“It was a very important statement of both who we are and our intent. It reflects the nature of our strategy both in differentiation and the important role [our] partners play in a different level of service and services.”