John Lewis managing director Andy Street has said that the depreciation of the pound following Brexit could be a “big issue” for the retailer.
Speaking about the impact of Brexit on consumer confidence and sterling he said: “The big issue that we are facing into is the decline in the exchange rate.”
Street added that John Lewis was, like most of its competitors, hedged for the next 18 months. He said that the issue was the following year and about how depreciation of the pound could affect other parts of the supply chain.
“At the moment it is a political not an economic crisis, but one could turn into the other if not properly handled”
Andy Street, John Lewis
He said: “You don’t know where cost inflation comes through from other things that are imported, perhaps one stage away from direct importing.”
On consumer confidence, Street remained cautious. He said that ten market days after Brexit was far too soon to tell whether consumer confidence was dented and that anyone who claimed they could measure consumer sentiment was “wrong”.
He added: “At the moment it is a political not an economic crisis, but one could turn into the other if not properly handled.”
He said that John Lewis’s partnership model would ensure its success in tough times.
“If we are into tougher times, it’s our model, our ability to do things that are counter-cyclical and possibly even counter-intuitive that will see us through,” he said. ”If you think about the origins of John Lewis’s current success I would put it to you that it was formed in the previous tough times.”
Street made the comments at a media dinner last night. He also pledged that John Lewis’s home department would become a £1bn business by 2020, with the retailer expanding its exclusive relationships with external brands.
Street also spoke about the development of multichannel, saying that by 2020 John Lewis predicted a 50/50 split between in-store and online sales. At present, the split is around two-thirds to one third in favour of in-store.
John Lewis’ boss also responded to reports published yesterday that he was running for Mayor of the West Midlands. “Don’t believe what it says in the newspapers,” he said. “It is pure speculation. That story has been running for over a year. The job doesn’t even exist yet.”