John Lewis has stolen the UK high street crown from Marks & Spencer after sales in Britain overtook the high street bellwether for the first time.
The success was two-fold as both parts of the staff-owned retailer, Waitrose and John Lewis, cemented their status as middle-England's favourite shopping destination with record sales.
"John Lewis has definitely replaced M&S as the darling of the British high street," said retail analyst Neil Saunders of Conlumino.
"M&S is still the more predominant – it has more stores and more shoppers – but when you look at new routes to market like online and mobile John Lewis is light years ahead."
The new heights scaled by the partnership are good news for its 91,000 staff – known as "partners" – who will share a bonus pool of more than £200m in this month's pay packet.
Every member of staff from the chairman to Saturday shelf-stackers gets the same level of bonus – which has this year been set at 15%, or about eight weeks' pay. A decade ago, sales at John Lewis Partnership were just £5bn, while M&S was in a different league with around £8bn. Those lines have now crossed.
The most recent figures available show M&S's UK business turning over £8.9bn last year, compared to the £9bn John Lewis and Waitrose achieved this year. M&S is not expected to eclipse John Lewis when it publishes more up-to-date figures in May.
This year's sales were boosted by the retailer's hugely successful Christmas advertising campaign – the Bear and the Hare cartoon – which became a YouTube sensation with 12.4m views.
It also benefited from the demise of Comet – which meant it sold far more electrical goods than ever before – and the upturn in the housing market which has boosted demand for new carpets and curtains.
In the past John Lewis was unfavourably compared with the civil service. It was slow to adapt to changing shopping habits such as late night shopping, Sunday trading and even accepting credit cards. But it did not make the same mistake with the internet.
Both chains have invested heavily in their website and the click and collect services that many time-pressed customers now take for granted. M&S, meanwhile, is playing catch-up with the recent relaunch of its website.
The latest savvy developments include Waitrose installing grocery collection lockers in London underground stations while John Lewis is backing a Silicon Roundabout-style technology incubator – called "JLab" – which it hopes will come up with the next big thing for its stores.
Unlike the toxic issue of bankers' bonuses there is no backlash from the public or politicians or members of the public when John Lewis doles out its annual staff bonus. Although small beer compared with payouts received by investment bankers – last month Barclays said its bonus pool was more than £2bn – the payout is equal to 15% of salary.
John Lewis staff earn the same as shopworkers at rival chains but the year-end bonus is a significant top-up.
This year the average payout is £2,225 and for some it can be life changing. Darren Hayes, who works in Waitrose's Aylesford depot, is using the extra cash to send his son nine-year-old Darragh, who has cerebral palsy, to the Peto Institute in Hungary for a course of intensive physiotherapy. "It's life-changing for me – 100%," says Hayes.
"I'm convinced he will walk out of there." John Lewis became a partnership in 1929 when John Spedan Lewis established a trust committed to sharing profits among staff.
The business's values, which include "putting the happiness of partners at the centre of everything we do", have not always been fashionable but the formula of rewarding staff – on top of the bonus staff will receive discounts and perks ranging from subsidised holidays to sailing clubs and theatre outings worth £120m this year – went from strength to strength during the recession.
"Both Waitrose and John Lewis increased market share for the fifth consecutive year," said chairman Charlie Mayfield.
"Our ownership by partners played a key role in these results. There are fundamental changes taking place in retail … the level of change has at times been challenging but partners have understood and embraced the need for their business to continue to develop."
Rivals such as Next, and M&S, are far more profitable than John Lewis but Iain Hasdell, chief executive of the Employee Ownership Association, says that is only one yardstick with which to measure success.
"John Lewis is a good antidote to how much of our economy is externally controlled and driven by the obsessive short-termism that creates a significant financial breakdown every generation."
Some mock the middle class values of the John Lewis brands - two years ago a Waitrose Twitter campaign which invited shoppers to "finish the sentence: 'I shop at Waitrose because …'" went awry with memorable comments such as: "because I was once in the Holloway Road branch and heard a dad say 'Put the papaya down, Orlando".
But it has not stopped them shopping there. As big supermarkets such as Tesco and Asda lose shoppers to German discounters Aldi and Lidl, Waitrose, led by Mark Price, has been holding its own thanks to a promise to match market leader Tesco's prices on brands and a loyalty scheme that offers free newspapers and coffee. "I asked my mother if she had shopped at Aldi or Lidl", said Price.
"She said yes, at Aldi. She bought four hub caps and a pack of carbon monoxide detectors." He said Waitrose had decided on a "very British response" ."We have decided to compete on giving our customers morning coffee and a cup of tea in the afternoon."
His latest thinking includes introducing concierge desks to welcome shoppers and tapas bars in its wine departments. It was not all plain sailing. Profits before the bonus and tax were down 4% at £329m after a £47m charge for compensating staff who had been underpaid for holidays.
The bonus was down from last year's 17% figure as the retailer also tackled a £1bn black hole in its pension scheme.
The holiday pay error has led to questions about the checks and balances in place at the partnership, given the backdrop of implosion at the Co-op where trust was shattered by the rescue of its bank and the Reverend Paul Flowers drugs allegations.
"Our governance structure is completely different to that of the Co-op group," insisted Mayfield. "The group is owned by the partners and they are represented on the board and there are also non-executives. We are very careful that our governance is in good and improving shape and we are not taking undue risk."
theguardian.com
The success was two-fold as both parts of the staff-owned retailer, Waitrose and John Lewis, cemented their status as middle-England's favourite shopping destination with record sales.
"John Lewis has definitely replaced M&S as the darling of the British high street," said retail analyst Neil Saunders of Conlumino.
"M&S is still the more predominant – it has more stores and more shoppers – but when you look at new routes to market like online and mobile John Lewis is light years ahead."
The new heights scaled by the partnership are good news for its 91,000 staff – known as "partners" – who will share a bonus pool of more than £200m in this month's pay packet.
Every member of staff from the chairman to Saturday shelf-stackers gets the same level of bonus – which has this year been set at 15%, or about eight weeks' pay. A decade ago, sales at John Lewis Partnership were just £5bn, while M&S was in a different league with around £8bn. Those lines have now crossed.
The most recent figures available show M&S's UK business turning over £8.9bn last year, compared to the £9bn John Lewis and Waitrose achieved this year. M&S is not expected to eclipse John Lewis when it publishes more up-to-date figures in May.
This year's sales were boosted by the retailer's hugely successful Christmas advertising campaign – the Bear and the Hare cartoon – which became a YouTube sensation with 12.4m views.
It also benefited from the demise of Comet – which meant it sold far more electrical goods than ever before – and the upturn in the housing market which has boosted demand for new carpets and curtains.
In the past John Lewis was unfavourably compared with the civil service. It was slow to adapt to changing shopping habits such as late night shopping, Sunday trading and even accepting credit cards. But it did not make the same mistake with the internet.
Both chains have invested heavily in their website and the click and collect services that many time-pressed customers now take for granted. M&S, meanwhile, is playing catch-up with the recent relaunch of its website.
The latest savvy developments include Waitrose installing grocery collection lockers in London underground stations while John Lewis is backing a Silicon Roundabout-style technology incubator – called "JLab" – which it hopes will come up with the next big thing for its stores.
Unlike the toxic issue of bankers' bonuses there is no backlash from the public or politicians or members of the public when John Lewis doles out its annual staff bonus. Although small beer compared with payouts received by investment bankers – last month Barclays said its bonus pool was more than £2bn – the payout is equal to 15% of salary.
John Lewis staff earn the same as shopworkers at rival chains but the year-end bonus is a significant top-up.
This year the average payout is £2,225 and for some it can be life changing. Darren Hayes, who works in Waitrose's Aylesford depot, is using the extra cash to send his son nine-year-old Darragh, who has cerebral palsy, to the Peto Institute in Hungary for a course of intensive physiotherapy. "It's life-changing for me – 100%," says Hayes.
"I'm convinced he will walk out of there." John Lewis became a partnership in 1929 when John Spedan Lewis established a trust committed to sharing profits among staff.
The business's values, which include "putting the happiness of partners at the centre of everything we do", have not always been fashionable but the formula of rewarding staff – on top of the bonus staff will receive discounts and perks ranging from subsidised holidays to sailing clubs and theatre outings worth £120m this year – went from strength to strength during the recession.
"Both Waitrose and John Lewis increased market share for the fifth consecutive year," said chairman Charlie Mayfield.
"Our ownership by partners played a key role in these results. There are fundamental changes taking place in retail … the level of change has at times been challenging but partners have understood and embraced the need for their business to continue to develop."
Rivals such as Next, and M&S, are far more profitable than John Lewis but Iain Hasdell, chief executive of the Employee Ownership Association, says that is only one yardstick with which to measure success.
"John Lewis is a good antidote to how much of our economy is externally controlled and driven by the obsessive short-termism that creates a significant financial breakdown every generation."
Some mock the middle class values of the John Lewis brands - two years ago a Waitrose Twitter campaign which invited shoppers to "finish the sentence: 'I shop at Waitrose because …'" went awry with memorable comments such as: "because I was once in the Holloway Road branch and heard a dad say 'Put the papaya down, Orlando".
But it has not stopped them shopping there. As big supermarkets such as Tesco and Asda lose shoppers to German discounters Aldi and Lidl, Waitrose, led by Mark Price, has been holding its own thanks to a promise to match market leader Tesco's prices on brands and a loyalty scheme that offers free newspapers and coffee. "I asked my mother if she had shopped at Aldi or Lidl", said Price.
"She said yes, at Aldi. She bought four hub caps and a pack of carbon monoxide detectors." He said Waitrose had decided on a "very British response" ."We have decided to compete on giving our customers morning coffee and a cup of tea in the afternoon."
His latest thinking includes introducing concierge desks to welcome shoppers and tapas bars in its wine departments. It was not all plain sailing. Profits before the bonus and tax were down 4% at £329m after a £47m charge for compensating staff who had been underpaid for holidays.
The bonus was down from last year's 17% figure as the retailer also tackled a £1bn black hole in its pension scheme.
The holiday pay error has led to questions about the checks and balances in place at the partnership, given the backdrop of implosion at the Co-op where trust was shattered by the rescue of its bank and the Reverend Paul Flowers drugs allegations.
"Our governance structure is completely different to that of the Co-op group," insisted Mayfield. "The group is owned by the partners and they are represented on the board and there are also non-executives. We are very careful that our governance is in good and improving shape and we are not taking undue risk."
theguardian.com
No comments:
Post a Comment