Which is harder – being a department store best known for its ranges in the execrable home market, or a grocer selling premium food to the middle classes, with a reputation for prices to match?
How about being both? Over the past year John Lewis’s weekly figures have served as a chronicle of the steadily worsening retail picture, so it was no surprise that its results on Wednesday showed a big hit to its profitability.
Perhaps more than any other retailer, JLP is a barometer of the middle class mood. The affluent home counties branches are suffering worst because – whether or not they still have their white collar jobs – the southern middle classes are anxious, buying less, and newly driven by price.
That’s bad news for John Lewis and Waitrose because they have an often undeserved reputation for being expensive. Never mind their service, assortment and ethics; in this market price – or price perception – surpasses all else.
This has been acknowledged. The launch of the Essential Waitrose range this week reflects that its hitherto subtle price message needs ramping up. It’s a shrewd move, and the department store chain could make more of its unique but poorly understood mantra of Never Knowingly Undersold.
But there’s no need for panic and there’s no sign JLP is going to. Its unique structure comes into its own in times like these, because there’s no need for the short-term decision-making that undoes so many when the going gets tough.
Rates catastrophe looms
Our revelation last week that Alistair Darling was refusing to budge on business rates made huge waves, particularly as it appears that other government ministers were telling retailers the opposite at the same time.
That should at least give us hope that there is a debate in Government over the rises due to take place in three weeks. Really there should be no debate, because to impose a 5 per cent rise in this market would be a crass move.
Retailers from Sir Terry Leahy, Justin King and Charlie Mayfield, right down to one-store independents, have come out in the pages of Retail Week against the rise. If Darling carries through with this potentially catastrophic move, he can’t say he wasn’t warned about the consequences.