John Lewis is to start charging shoppers for click-and-collect on small orders as it brands the market’s prevailing free model unsustainable.
- John Lewis to charge £2 on click and collect orders below £30
- Boss Andy Street says current model of free delivery is “unsustainable”
- Street confident shoppers will understand the move
The department store group will impose a £2 fee on orders under £30. Click-and-collect orders above that threshold will remain free.
It is a controversial move by John Lewis, which until now had fulfilled all click-and-collect orders for free. Yesterday (Tuesday) Amazon launched free two-hour home delivery for its Prime members, and John Lewis’s department store rivals all offer free click-and-collect.
But John Lewis boss Andy Street said he is “confident” customers will understand the move and believes other retailers may follow suit.
“We want to take a leadership position,” said Street. “This market has got to be sustainable. It’s illogical this can be produced at no cost. We think our customers will understand this is reasonable.
“Customers understand John Lewis has been around for 150 years and we’ll be around for another 150 years. They understand we’re a good corporate citizen and can’t give everything away for free. There is a huge logistical operation behind this system and, quite frankly, it’s unsustainable.”
Speaking at John Lewis’s Christmas in July event last night in London, Street highlighted the volatility of the fulfilment market by noting the collapse of delivery firm City Link on Christmas Day last year.
“The time has come to take a clear position in the market,” said Street.
He said he was “not concerned” about other retailers including Amazon improving its free delivery options while John Lewis is imposing charges.
“I feel confident in our position,” he maintained, pointing to the retailer’s extensive click-and-collect network which includes Waitrose and Collect+.
Street said only 18% of click-and-collect orders are below £30, meaning a minority of John Lewis shoppers would be affected by the move.
He said that he was expecting “another logistics Christmas”. Last year the explosion of Black Friday tested retailers’ logistics operations like never before.
Street believes Black Friday will “probably be 20% bigger” than last year. “But we’re better placed than our competitors,” said Street, who noted the retailer has spent “hundreds of millions of pounds in the last few years” on its logistics operations.
He said he is expecting John Lewis to record another market beating performance this Christmas.
The retailer’s sales were up 2.9% in the first 22 weeks of its financial year, and Street said “if we get near 5% [over Christmas] I would be delighted with that”.
He admitted this year had been tougher than last. “It’s a solid start to the year but it’s not been the major sales uplift we’ve enjoyed in other years. Sales are ahead of the market but off the pace of other years. We had a wobble in the big-ticket market around the general election.”
He added: “Consumers are better off but that is not feeding through into retail.”
He said electricals had been challenging due to the lack of product innovation in the market.
In September the retailer relaunches its home department in its flagship Oxford Street branch which Street said will be the “best home shop in the country if not Europe”. John Lewis is also opening its first full line store in four years in Birmingham.