Robust sales for Waitrose and John Lewis

In the half year, Waitrose saw sales rise by 7.8 per cent while John Lewis sales rose by 6.6 per cent.

A very robust set of results from the Partnership are tempered only by the fact profit, on a before tax basis, was down some £42.9m to £68.5m; something that will, ultimately, impact on next year’s bonus pot. However, given that this fall was the result of exceptional items (mostly an adjustment due to changes in holiday pay policy), while disappointing it is not indicative of the underlying performance of the business. Indeed, when exceptional items are stripped out, the Partnership’s profit increased by 3.9 per cent or £4.4m.

Profit aside, the sales numbers clearly demonstrate that despite its good run of growth, the Partnership remains firmly on the front foot with both sides of its business notching up very strong performances.

In our view, the biggest single weapon in the Partnership’s armoury remains its ability to take a long term view of the market and invest appropriately in areas that it sees as delivering future value. This is certainly a function of the freedom which comes from being an employee owned, rather than a public, company. It is also, however, down to the culture and attitude of the business and its management which have, over the past 5 or so years, injected a real sense of pace and purpose throughout the organisation.

John Lewis

Off the back of a strong set of comparatives John Lewis has maintained its momentum and confirmed that it remains one of the success stories of British retail. While recent years have seen sales propelled by a strong programme of new store openings, the latest like-for-like figures – which significantly outstrip those of total UK retail – underline the fact that investments in stores, systems and assortments are all helping to drive growth across the business.

Despite its performance, John Lewis remains paranoid about becoming complacent which has helped to foster culture of energetic self-appraisal and reinvention. This, in a market which is rapidly shifting and reshaping, is one of the keys to its continued success. Indeed, it would not be unreasonable to say that John Lewis is firmly in the vanguard of innovative and forward thinking retailers.

The practical implication of all this is that, to consumers, the offer, service and proposition are perhaps more relevant today than they have ever been. For example, in fashion John Lewis has been quick to respond to the flight to quality with brands such as Alice Temperly and John Lewis & Co – both of which have a strong appeal to clearly defined target audiences. Equally, John Lewis has been responsive to the greater demand for personalisation and customisation in home products with its "bespoke" upholstery service. Innovation also extends to online where, as well as an extensive overhaul to the website, new delivery options such as Collect Plus have been trialled.

If innovation is important, it is nothing without proper execution. This is another area in which John Lewis arguably excels. Although the company has a lot on its agenda, it usually takes the time to think changes through and ensure they are properly delivered. The upshot is that the vast majority of the developments it puts in place deliver good returns.

Current and past success is all well and good; however, maintaining this for the future is what really counts. On this front, we hold with our view that John Lewis will significantly outperform the market over the medium term. A new pipeline of stores, further range innovation, continued investment in the website and fulfilment, and strong marketing campaigns will all underpin future growth. It is also true that despite the fact the business is now much larger than it was 5 years ago it still has massive headroom for growth in terms of both new customer acquisition and geographical expansion.

Waitrose

In a flat grocery market Waitrose put in a stellar performance with significant advancements in both total and like-for-like sales. This comes off the back of a long period of market outperformance, over which time the grocer has successfully grown its market share against the backdrop of a very tough, competitive trading environment.

Particularly pleasing is the success of the online operation, where sales were up by 40.6%. This is the result of both strong marketing and investment in fulfilment capacity to increase slot availability for consumers.

Innovation remains at the heart of Waitrose’s success. On the food front this manifested itself in the redevelopment of the Menu range, an enhancement and extension of home-baking products, and extending the premium Heston range of products to new categories. Outside of food Waitrose has also been proactive in seeking out new sales opportunities, such as in gardening where it developed a new horticulture range designed to appeal to its largely green-fingered customer base. In a market where food volume growth will remain sluggish, indentifying such incremental sales opportunities has become increasingly important and is something that will deliver growth for Waitrose over the longer term.

Store investment and enhancement will also help drive sales over the medium term and is also important in terms of allowing Waitrose to maintain its service differentiation. In this regard the new service desks the company is introducing will help improve service standards for click-and-collect shoppers as well as underlining many of the (often previously ‘hidden’) added-value service Waitrose offers, such as flower wrapping and the loan of glasses or fish kettles.

Although the grocery market will remain challenged in terms of volume growth, our view is that Waitrose will continue to build share. A combination of new store openings, a continued commitment to value, the growth of convenience and online, and some conservative expansion of the non-food offer will all underpin this success.

Photograph: Getty Images

 Managing Director of Conlumino

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Inside the progressive alliance that beat Zac Goldsmith in Richmond

Frantic phone calls, hundreds of volunteers, and Labour MPs constrained by their party. 

Politics for a progressive has been gloomy for a long time. On Thursday, in Richmond Park of all places, there was a ray of light. Progressive parties (at least some of them) and ordinary voters combined to beat Ukip, the Tories and their "hard Brexit, soft racist" candidate.

It didn’t happen by accident. Let's be clear, the Liberal Democrats do by-elections really well. Their activists flood in, and good luck to them. But Richmond Park was too big a mountain for even their focused efforts. No, the narrow win was also down to the fast growing idea of a progressive alliance. 

The progressive alliance is both a defensive and offensive move. It recognises the tactical weakness of progressives under first past the post – a system the Tories and their press know how to game. With progressive forces spilt between Labour, Liberal Democrats, Greens, the SNP, Plaid Cymru, the Women’s Equality Party and more – there is no choice but to co-operate, bring in proportional representation and then a whole new political world begins.

This move opens up the wider strategy – to end the domination of the City, and right-wing newspapers like the Mail, so Britain can have a real debate and make real choices about what sort of economy and society it wants. A pipedream? Well, maybe. But last night the fuse was lit in Richmond Park. The progressive alliance can work.

Months before the by-election, the pressure group for a progressive alliance that I chair, Compass, the Greens, and some Labour, Liberal Democrat and SNP MPs and activists, began considering this. The alternative after Brexit was staring into the void.

Then the Tory MP Zac Goldsmith stepped down over Heathrow. To be fair, he had pledged to do this, and we should have been better prepared. In the event, urgent behind-the-scenes calls were made between the Greens and the Liberal Democrats. Compass acted as the safe house. The Greens, wonderfully, clung onto democracy – the local party had to decide. And they decided to stand up for a new politics. Andree Frieze would have been the Green candidate, and enjoyed her moment in the autumn sun. She and her party turned it down for a greater good. So did the Women’s Equality Party.

Meanwhile, what about Labour? Last time, they came a distant third. Again the phones were hit and meetings held. There was growing support not to stand. But what would they get back from the Liberal Democrats, and what did the rules say about not standing? It was getting close to the wire. I spent an hour after midnight, in the freezing cold of Aberdeen, on the phone to a sympathetic Labour MP trying to work out what the party rule book said before the selection meeting.

At the meeting, I am told, a move was made from the floor not to select. The London regional official ruled it out of order and said a candidate would be imposed if they didn’t select. Some members walked out at this point. Where was the new kinder, gentler politics? Where was membership democracy? Fast forward to last night, and the Labour candidate got less votes than the party has members.

The idea of a progressive alliance in Richmond was then cemented in a draughty church hall on the first Tuesday of the campaign – the Unitarian Church of course. Within 48 hours notice, 200 local activist of all parties and none had come together to hear the case for a progressive alliance. Both the Greens and Compass produced literature to make the case for voting for the best-placed progressive candidate. The Liberal Democrats wove their by-election magic. And together we won.

It’s a small victory – but it shows what is possible. Labour is going to have to think very hard whether it wants to stay outside of this, when so many MPs and members see it as common sense. The lurch to the right has to be stopped – a progressive alliance, in which Labour is the biggest tent in the campsite, is the only hope.

In the New Year, the Progressive Alliance will be officially launched with a steering committee, website and activists tool-kit. There will also be a trained by-election hit squad, manifestos of ideas and alliances build locally and across civil society.

There are lots of problems that lie ahead - Labour tribalism, the 52 per cent versus the 48 per cent, Scottish independence and the rest. But there were lots of problems in Richmond Park, and we overcame them. And you know, working together felt good – it felt like the future. The Tories, Ukip and Arron Banks want a different future – a regressive alliance. We have to do better than them. On Thursday, we showed we could.

Could the progressive alliance be the start of the new politics we have all hoped for?

Neal Lawson is the Chair of Compass, the pressure group for the progressive alliance.

Neal Lawson is chair of the pressure group Compass, which brings together progressives from all parties and none. His views on internal Labour matters are personal ones.