2018, and the many retailer collapses that it has brought, is not the end of the revolution engulfing retail. It may only be the start.

That was the message I took away from John Lewis Partnership’s strategy update today – a first for the retailer, which has traditionally restricted such takes on the market, and its particular direction, to results day presentations.

The analysis was pitched from a viewpoint in 2028, the centenary of the partnership’s constitution, which set out the principles and governance rules that make the retailer the unique institution it is.

The point was to ensure the partnership does not simply survive the present earthquake shaking the retail industry to its foundations, but thrives.

The presentation was strewn with dramatic phrases. “This isn’t a blip, it’s a shift and it’s got a long way to run,” was partnership chairman Sir Charlie Mayfield’s take on the changes reshaping retail.

“We all must feel the jeopardy of what is going on in retail right now,” he warned. “I am not going to try and soft-soap anyone and say it will all be OK and the sun will be coming out soon.”

“The point is less that John Lewis is taking a profit hit. More that not only can it afford to take that hit, unwanted as it may be, it can contextualise it within a long-term strategy”

The facts he set out were as dramatic as his turn of phrase.

The partnership’s first-half profits are likely to be “close to zero”.

The picture for the full year is cloudy. “There are a wide range of possible outcomes given the market uncertainty, but we are currently assuming that profits before exceptional items will be substantially lower than last year,” the retailer revealed.

Those disclosures prompted ‘profit warning’ headlines. But, while hardly good news, the story behind them and the response to the challenges facing John Lewis and the industry matters more.

The point is less that John Lewis is taking a profit hit. More that not only can it afford to take that hit, unwanted as it may be, it can contextualise it within a long-term strategy.

To enact that strategy, the business must be set upon the firmest financial foundations. John Lewis is and will be. Over the last three years the partnership has strengthened its balance sheet by more than £750m.

Over the next three, the balance sheet will be further bolstered to the tune of £500m through measures ranging from rebuilding the profitability of Waitrose – the grocer will, in contrast to the eponymous department store division, report earnings growth this year – through to efficiencies resulting from supply chain and IT investment and realising value from property through, for instance, exploiting ‘air rights’ above stores for housing or other uses.

The partnership’s financial firepower will enable investment of between £400m and £500m a year in the capabilities to deliver its strategy.

Strategic aims

And what is that strategy? In many ways it is an acceleration along the path already taken.

There will be focus on differentiation, such as more exclusive and own-brand product at John Lewis – the ambition is for the proportion to rise from 30% now to 50%.

At both John Lewis and Waitrose, exemplary standards of service will be at the heart of differentiating the businesses.

Waitrose staff will become ‘food ambassadors’ and at John Lewis skills development and technology aids will help staff “tap into burgeoning customer demand for trusted advice and expertise in fashion and home”.

Significantly, scale becomes less of a priority for the partnership.

There will be “an increased focus on competing through differentiation and innovation, not scale”. Waitrose will focus on core customers while across both businesses there will be “adjustments” to the estate, although closures are likely to be “at a rate in line with what we have seen over the last few years”.

“There is simply an excess of space versus demand,” Mayfield said of the retail property market generally – a comment reflective of retail reality and likely to strike fear into the hearts of many retailers, especially those that have not moved fast enough to build multichannel appeal.

“Few have such a powerful sense of self as John Lewis. Many others, sadly, would fail to identify a real point of difference that sets them apart”

At each division, partners will take on an ever greater role “at the heart” of the group. “They are the partnership’s point of difference and its competitive advantage,” it was emphasised today.

In recognition of that, as revealed by Retail Week on Monday, the businesses will be rebranded John Lewis & Partners and Waitrose & Partners.

The rebranding is expected to begin in September and will be rolled out gradually rather than in one fell swoop.

Drawing on the partnership’s heritage, Mayfield said: “We are a retailer but we are also an idea.”

It was a powerful statement, and should prompt other retailers to ask themselves what their fundamental purpose is. Few have such a powerful sense of self as John Lewis.

Many, sadly, would fail to identify a real point of difference that sets them apart from another next door or from the mighty Amazon, with the convenience and low prices it has in its armoury.

Just as important, comparatively few have the financial firepower of John Lewis, or would be given the authority by shareholders to soak up the cost of investing in a strategy for the long term rather than simply reacting to the imperatives of daily, tough, high street life.

The takeaway from today is that more well-known retailers are likely to disappear from the high street in the coming years, but John Lewis chiefs are determined the partnership will not be among them.