Yesterday we heard how retail champion Next disappointed on Christmas trading. So what about can-do-no-wrong John Lewis? All I can say is “wow”.
Actually that’s not all I can say, but you get the point. In one of the most difficult and volatile Christmas trading periods for years, the company really came through with no moaning about dodgy weather or Black Friday. OK, grocery wasn’t perfect but the department stores and website really powered ahead in a game-changer season.
Total sales at the John Lewis Partnership in the six weeks to Saturday 2 January were up 4.1% on the year to £1.811bn.
Waitrose supermarkets rose 1.2% but fell 1.4% on a comparable basis while the John Lewis chain rose a healthy 6.9% to £951.3m, or 5.1% comparable. At last, some good news.
Chairman Sir Charlie Mayfield could be forgiven for sounding smug but in the event he was low-key: “This has been a strong Christmas trading period for the Partnership despite the non-food market seeing significant shifts in trade patterns and the grocery market continuing to be challenging.”
What’s the trend?
2015 was definitely different. John Lewis said patterns of trade shifted significantly, characterised by three distinct sales peaks – Black Friday, Christmas and Clearance – with higher sales and a different channel mix for each peak.
This made logistics key and John Lewis said the combination of its shops, website and fulfilment centres working together was a major boon. For example, on the Black Friday weekend its distribution teams processed 18% more parcels than last year, which equated to five units per second during the peak hour.
It also meant retailers have to get used to new rules as far as visitor traffic is concerned. Sales in the company’s shops for the total six week period may have been down 1.2%, reflecting lower footfall pre-Christmas, but they were up 16.2% during the first week of Clearance.
And online, as always, is a factor that’s increasingly important. Online sales grew by 21.4% compared to last year and mobile continued to be the fastest-growing channel, with sales from smartphones and tablets up 31%. Sales through Click & Collect were up 16% and it was the delivery method of choice for half of all online orders. Online now accounts for 40% of all of John Lewis’s sales – yes FORTY PERCENT!
Need to know
- Trade was even more concentrated across a number of very busy shopping days.
- John Lewis itself achieved another “very strong” sales performance with impressive growth across all three categories of Fashion, Home and Technology.
- There was a balanced contribution from all three product areas at the John Lewis unit, with Home up 5.1%, Fashion up 6.1% and EHT (technology) up 9.6%.
- There was a successful start to the clearance period with sales up 23% for week ending January.
- Companywide, Click & Collect continued to show the strength of the two brands working together, with 35% of John Lewis online orders collected from Waitrose branches.
- Customer numbers increase 5.8% against the same period last year.
- The performance didn’t come from nowhere – in fact it reflects to a large extent the significant investment the company has made in its distribution and IT capability.
- Profit expectations for the year to January 30 remain on track at £270m to £320m compared to £342.7m a year ago (the drop is linked to increased pension charges).