?? Mark's Favourites- John Lewis Partnership: a new venture

Here’s a new curation from?Mark Faithfull, an expert in consumer behaviour, e-commerce, and retail real estate with years of experience as a retail analyst for clients like Forbes and The Economist. Don’t miss out on his invaluable takes on our industry and its development, and follow?#MarksFavourites?to stay up to date with this series!

One of the central themes of MAPIC in recent years has been about the reinvention and transformation of the industry.

We have seen this with the evolution of shopping centres to mixed use destinations, the growing presence of proptech at MAPIC and also in the diversity of new brands which attend and exhibit, many of which have started life online only or as direct-to-consumer businesses.

But one recent story in the UK is also a reminder of how change has to be handled carefully, sensitively and also about the importance of the value of heritage.

Because where once UK-based department store John Lewis (and its sister, upscale supermarket chain Waitrose) could do no wrong with its roster of emotional Christmas ads, renowned customer service and promise to “never knowingly be undersold”, now it is facing a storm about a profound proposed change.

John Lewis Partnership, the owner of both John Lewis department stores and grocery chain Waitrose, has intimated that it may look to change its highly unusual ownership model. The company is owned by its staff – or ‘partners’ – who also famously usually enjoy a substantial bonus annually.

But in response to an alarming decline in results, John Lewis Partnership has not only appointed its first group chief executive, Nish Kankiwala, and abandoned the bonus for the second time in three years, but has said that to reverse its fortunes it needs outside funding, which would mean bringing in a minority partner from outside the partnership model.

John Lewis has also pushed ahead with plans for the development of private rental apartments above Waitrose stores and other real estate as a new revenue stream and has struck a deal with investment giant Abrdn for 1,000 new homes.

This is a completely new venture for the business and in many ways mirrors the ‘densification’ of retail footplates that has been embarked upon by many shopping centres.

However, the headlines have been captured by the senior management’s proposals to alter the partnership model and it would be fair to say that in most quarters these musings have not gone down well.

Former boss Andy Street, now the mayor of the West Midlands and a speaker at MAPIC’s sister event MIPIM in March, called the prospect a “tragedy”.

Aside from move away from a structure that has been in place for nearly a century, there are questions about whether management is looking for an easy fix to strategy issues of their own making.

And it is also a reminder of the role of heritage and tradition in the consumer space. For many shoppers the subtle difference in the way John Lewis is owned makes a much greater difference to how they perceive the business as a brand.

Breaking that up risks John Lewis becoming ‘just another retailer’ amid an ever more competitive and innovative retail landscape.

So while we rightly look to transformation, reinvention and the disruptors for a future vision of retail, it’s also worth remembering that these should not obscure the tangible value of history and its resonance with consumers.

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