Discount pressures continue to colour John Lewis sales story

By

Sandra Halliday

Published
Nov 5, 2019

It was a bad news week for John Lewis Partnership in the seven days to November 2 as the retailer said that parent company sales fell almost 7% to a little over £223 million, but the department stores chain fell even more.

In fact, the department stores saw plunging sales, particularly in fashion. Overall, sales dropped by 10.4% on the same week last year as it "annualised against competitor promotions". This means that this time last year, it was price-matching rivals to drive sales and not doing that last week kept turnover muted.

In the often-buoyant Fashion department, sales were down a hefty 16.6%, although sales of beauty and premium accessories were up as “customers shopped promotions across these categories”. But again, it's clear that promotions were the sales drivers here, not compelling products or must-have trends.

What’s worrying about all this is that John Lewis has traditionally been seen as the most resilient of the mid-market department stores. Factoring out the luxury niche occupied by Harrods, Harvey Nichols, Liberty and, of course, Selfridges, the UK department stores scene has been mainly about House of Fraser, Debenhams and John Lewis.

With the first two of this trio having had well publicised problems in recent years, John Lewis was a beacon as a well-run business rising above the challenges that a changing and cautious market was offering up.

But it seems that even John Lewis can’t bat away the ongoing profits-sapping consumer obsession with discounts, whether in fashion or beauty.

Its weakness has been particularly visible for some time in its Home department as well, and once again in the latest week, Home sales dropped. They were down by 14.1%, even though customers were decorating their homes and preparing for Christmas earlier than ever with Christmas Shop sales up 22.1%. It’s interesting though that it also saw an increase in sales of “experience” gifts, which were up 92% compared to last year.