John Lewis Partnership bonus at risk despite 'positive' Christmas trading

John Lewis: teased Christmas campaign on Oxford Street shop front
John Lewis: teased Christmas campaign on Oxford Street shop front

John Lewis MD pledges to keep 'Never knowingly undersold' offer 'in good times and bad'.

Both John Lewis Partnership brands enjoyed a "positive Christmas trading period", according to chairman Charlie Mayfield, despite his acknowledgement that its partners may not receive a bonus this year for the first time since 1953.

Gross sales across John Lewis & Partners and Waitrose & Partners for the seven weeks to 5 January were up 1.4% year on year to £2.2bn. John Lewis was the stronger performer, with total sales up 2.5% and like-for-like sales growing 1.0%.

According to British Retail Consortium data, this means the brand outperformed the market in non-food by 2% – something that "does reflect the softness of the market", John Lewis managing director Paula Nickolds said.

2018's Black Friday resulted in the biggest-ever week of sales for John Lewis, while Nickolds said promotional activity had been 20-30% higher than the previous year.

Due to the brand’s "Never knowingly undersold" position, in which it pledges to match the price offered by competitors, John Lewis is forced into making price cuts for Black Friday and Nickolds had previously commented that "if it [Black Friday] didn’t exist, I wouldn’t invent it".

However, she insisted there was no possibility of ending "Never knowingly undersold": "It’s an important part of our commitment to consumers – it’s about trust and needs to stand up in good times and bad."

Asked about the impact of the John Lewis' Christmas campaign, starring Elton John, Nickolds said it achieved 50 million views on social media, up 60% on the previous year’s campaign. "It underlines as ever the message we’ve been using for a number of years about thoughtful gifting," she added.

At Waitrose, like-for-like sales nudged up just 0.2%. Data earlier this week from Kantar Worldpanel showed that Waitrose was the worst-performing supermarket over the last 12 weeks of 2018.

Managing director Rob Collins said this had been impacted by a reduction in discounting, adding that online sales had grown by 12.8% over the period.

On the Waitrose Christmas campaign, which was more product-focused than in previous years, Collins said "the early analysis suggests the strategy has worked really well for us".

Both the specific products featured in ads, such as chocolate mince pies and stollen bites, and those similar to them, sold well, Collins said.

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