John Lewis shutters eight more stores as it pushes ahead with local format

John Lewis has confirmed it will not reopen eight stores once restrictions lift on essential retail on 12 April, as the department store chain adjusts to the biggest change to the high street “for a generation”.

The retailer says it has chosen the eight stores for closure as they exist in locations that cannot sustain a large store and don’t “have enough customers” and that were already challenged prior to the pandemic.

The closures, which will see 1,465 jobs at risk, include four department stores in Aberdeen, Peterborough, Sheffield and York, as well as four ‘At Home’ shops in Ashford, Basingstoke, Chester and Tunbridge Wells.

The “rebalancing” of the John Lewis store estate means that now just 34 stores will reopen once restrictions lift next month.

“Today’s announcement is incredibly sad news for our affected partners, for our customers and for the communities we’ve served over many years,” says chairman of the John Lewis Partnership, Dame Sharon White.

“The high street is going through its biggest change for a generation and we are changing with it. Customers will still be able to get the trusted service that we are known for – however and wherever they want to shop.”

Speaking at its full-year results earlier this month, the retailer explained it wanted to reshape its business after notching up a £517m pre-tax loss in 2020. John Lewis is hoping to tap into the shift to remote working and the promise of localism with the rollout of smaller, service-orientated local outlets.

The high street is going through its biggest change for a generation and we are changing with it.

Sharon White, John Lewis Partnership

According to the retailer, this push towards localism is the result of extensive consumer research suggesting customers want more convenient access to John Lewis.

The partnership claims that department stores remain “critical” to its future success and provide a sensory experience online shopping cannot offer. However, the focus will be on having “fewer bigger” shops, positioned as destination stores in city centres offering new product, food and drink and services customers cannot access online.

These stores will be complemented by several stores in neighbourhood locations offering a mix of services, including alterations, home consultations and personal styling, with a curated edit of products that will change on a regular basis.

The strategy is also to more closely integrate the John Lewis brand into Waitrose stores. By the end of the year, all general merchandise sold in Waitrose will be John Lewis branded and the organisation is also trialling John Lewis “inserts” in five Waitrose stores.

John Lewis plots local strategy amid ‘economic earthquake’ of Covid

While the retailer believes physical retail still has an important part to play, expectations are that 60% to 70% of John Lewis sales will be made online in the future. Whereas pre-pandemic £6 in every £10 spent online with John Lewis was driven by its shops, this ratio has fallen to £3 in every £10. Already close to half of customers use a combination of store and online when making a purchase.

Feeding into this shift, the chain wants to offer an expanded click-and-collect network extending to more Waitrose stores and local collection points with third parties, such as the Co-op.

John Lewis is sinking £800m into its turnaround strategy, as it looks to regain stability and adjust to the new retail environment.

The chain is poised to introduce a new pricing structure, with new entry price points being launched for spring/summer 2021, while the iconic ‘Never Knowingly Undersold’ price promise remains under review.

Diversification is also on the agenda. By 2030, the partnership wants 40% of its profits to come from areas outside retail, namely financial services, housing and outdoor living.