The John Lewis Partnership has forecast that its full-year sales decline could double at John Lewis and slide at Waitrose despite the current coronavirus-induced surge in grocery sales.
The retailer has said it is planning for a “worst-case scenario” of full-year sales falling 35% at John Lewis and a “more modest decline of less than 5%” at Waitrose, which would anticipate “significant sales decline between April and June, and weak sales thereafter.”
Since the department store retailer shuttered its stores in March, online sales have spiked and are up 84% year on year since the middle of March. But this increase has not been sufficient to offset lost sales from store closures, which prompted John Lewis to furlough 14,000 colleagues at the beginning of April. Sales across John Lewis are down 17% overall since mid-March and down 7% since January 26.
By contrast, Waitrose sales are up 8% year on year since January 26 driven by strong demand for cupboard essentials such as rice, pasta, home baking, frozen food and cleaning products. The grocer has increased its capacity for home delivery by half over the course of the coronavirus crisis, which it said puts it “in good stead ahead of the ending of the Ocado contract in September.”
The John Lewis Partnership has unveiled a host of measures to cut costs as a result of the pandemic, including cutting back on marketing spend by approximately £100m, reducing the pay of the executive and non-executive team by 20% for an initial three-month window and negotiating with landlords to switch to monthly rather than quarterly rent payments.
Chair Dame Sharon White also said the retailer, which made 1,200 employees redundant over the last financial year, would make “further job losses in the coming year”, but that the business needed “to reassess these future plans and the achievable timescales due to the impact of coronavirus.”
For the same reason, White said: “It is likely that our strategic review will take longer than originally planned.”
Former Waitrose managing director Rob Collins and former John Lewis managing director Paula Nickolds, who both left the business in January, received £892,362 and £939,773 respectively in respect of notice period, redundancy pay and legal fees.
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