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  1. The Weekend Report
7 October 2023

How a brilliant civil servant led John Lewis astray

Sharon White never really understood retail democracy.

By Will Dunn

Of the 11,459 British shops that closed permanently in 2021, none were mourned so much as John Lewis in Sheffield. Samuel Thompson, who grew up in the city, was a maths student at Sheffield University when he heard the news; he set up an online petition, thinking a few other locals might join him in voicing their concerns. In less than a week, it was signed by almost 25,000 people.

Many who signed the petition saw John Lewis as “the heart of Sheffield”. The Cole brothers had developed their department store on what is still known as “Coles Corner”, a popular meeting-place, in the mid-19th century, and when John Lewis bought the business during the Second World War the Coles name was kept (it would last until 2002). When the giant out-of-town Meadowhall shopping centre opened in the 1990s, residents were pleased that John Lewis stayed true to the city centre. Petitioners – some of whom who had furnished their homes from Coles for decades – said it had become “the only reason” to make the journey into town, not just a shop but a social institution, the embodiment of a culture of mercantile decency – a calming presence in a changing world. “First we lost the steel, then the mines,” one wrote, “and now you are taking away our last bit of therapy.”

Despite the outcry – and the efforts of Sheffield City Council, which had bought the building for £3.4m the previous year – the closure went ahead, and it remains empty; 15 other stores would close during 2020-21 and 1,000 redundancies would be made. These were part of a series of tough decisions made by Sharon White, who became chair of the John Lewis Partnership (which operates the John Lewis chain of department stores and Waitrose supermarkets) just as the pandemic arrived in February 2020. These decisions included changes to what made John Lewis unique, such as the removal of the “never knowingly undersold” promise, which had underscored its pricing since 1925, and a plan to change the company’s staff-ownership structure.

On Monday (2 October), after a turbulent year in which she narrowly survived a vote of confidence in her leadership, White announced that she will step down as chair when her current term ends in February 2025. Her supporters say she has shored up the company’s finances during a period of unprecedented difficulty, heading off the challenges of the pandemic, the changing nature of retail on the high street and the rise of the discount supermarkets. Her critics say she has changed the nature of a great British institution, and brought into question the survival of retail democracy.

In interviews with current and former partners, as the more than 80,000 employees and co-owners of John Lewis and Waitrose are called, staff have shared their views on whether White has been the saviour or the scourge of a beloved institution. The question reveals a divide at the heart of John Lewis, between modernisers and traditionalists, and between the head office and the shop floor.

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Everyone I spoke to agreed that Sharon White is exceptionally smart, competent and pleasant to work with. As the pandemic took hold, she remained a “visible and accessible” presence in the company’s head offices in Victoria, central London, where staff say she was always prepared to have conversations as every high street in the country was suddenly closed.

White’s experience at running large organisations is formidable: an economist who worked in the Downing Street policy unit under Tony Blair, she had been a director-general in two government departments and second permanent secretary at the Treasury – one of the most powerful roles in government – before leaving in 2015 to become chair of the media regulator, Ofcom.

When her appointment as Chairman (as the John Lewis Partnership calls the role) was announced, however, partners asked each other why they were being led by someone who had never run a company, let alone two of the country’s largest retail businesses. Her predecessors, Charlie Mayfield and Stuart Hampson, were seasoned retailers with up to a decade’s experience at the company before taking the top job. Paula Nickolds – who had joined the company as a graduate trainee in 1994 and become managing director in 2017, and was credited with successes such as the Christmas TV ads – was widely tipped to move into the top job, but after a contentious restructure Nickolds abruptly left, a month before White’s arrival.

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Head-office employees seemed less concerned by White’s lack of retail experience. One told me they saw running a modern business as a matter of culture and brand-building, and that such concerns were “probably a reflection of the fact that the [retail] industry itself is a bit antiquated”.

In Victoria, White was seen as leading a wave of “new people” who wanted to “kick things on and become far more competitive”; under her lead, one person who identified themselves as part of this group told me, John Lewis would start “acting more like a global brand” with an eye on “the real world, away from the high street”.

Other partners were concerned by the way change was taking place, particularly “the constant reshuffling and restructuring”. A transformation of head office was followed by a mass cull of store managers – but then almost immediately people from the shops were seconded back into head office. “It definitely felt very civil service,” one partner told me.

The influx of new people led to a wave of new ideas from head office: the partnership would branch out into more financial services, it would build 10,000 new homes and become one of the country’s biggest landlords. But while lofty ideas emerged from Victoria, the shops were falling into disrepair. “Why are we doing this,” one partner asked, “when our buildings are falling apart, our air-con doesn’t work?” White’s vision, they said, “didn’t go hand in hand with a better experience in the shops”.

For many years a job at Waitrose, or in a John Lewis café, was highly prized among teenagers and students: the pay was above average, working conditions were good and breaks were generous. There was the bonus, too – a yearly payout to all staff, based on a percentage of their pay – but for those on the lowest pay this was a minimal benefit. What mattered to them was what mattered to the shoppers: decent work in a nice building, filled with nice people. As conditions in the stores changed – I’m told Waitrose cafés were among the worst hit – so did morale and the customer experience.

The fabled customer service, too, was being eroded by the use of outsourced “contact centres”, which had begun before White arrived; in 2019 the American company that ran the main contact centre began making redundancies in the UK and creating jobs in the Philippines. One partner described spending much of their day helping customers correct the bad advice they’d been given by outsourced workers over the phone.

Meanwhile, the new ideas added new stresses: a deal between Waitrose and Deliveroo added faster delivery and new jobs were created, but one source told me it “massively increased” workloads in some stores.

A key moment for many partners was the abrupt change in the provider of the Partnership Card, which had since 2004 offered credit and rewards in both John Lewis and Waitrose, last year. The old cards had been provided by HSBC, with which customers were familiar as a high-street bank. The new provider, NewDay, quickly became the focus of complaints as 600,000 customers began using their new cards; many found their credit limits were suddenly lowered, their interest rates had increased, or they had less time to make payments. Others found their cards wouldn’t work for online purchases because they were flagged as “foreign-issued debit cards”.

“That was one of the big moments,” a former partner told me, “where our customers turned around and said, you didn’t know what you’re doing.”

The job of chairing one of Britain’s largest companies (compensated, in White’s case, by a starting salary of £990,000) involves taking responsibility for its fortunes, but White is not the only person partners hold culpable for the company’s current direction. Mayfield and the former managing director Andy Street, now the Mayor of the West Midlands, were both criticised by partners.

One partner told me that a senior executive, who has now left the company, took contentious decisions that affected issues such as partners’ pay, then aggressively defended them when questioned on the company intranet in a way that “undermined” and “essentially bullied” the people who had asked those questions. “The mismanagement doesn’t start and end with Sharon, that’s for sure.”

White’s key mistake, however, seems to have been the under-appreciation of how important the founding principle of John Lewis – retail democracy – is to the partners. When the executive team decided to drop the “never knowingly undersold” promise, there was little communication with partners working in the stores. “We heard about it from the media,” one recalls. “It didn’t feel particularly open or democratic.”

When issues were voted on, one partner told me, there simply wasn’t time for a real debate among staff, especially those that were working flat-out in poorly maintained shops, supermarkets and cafés, or coping with the impact of new innovations. It was this democratic deficit that would be White’s downfall. Having made a £234m pre-tax loss in 2022-23, White began to talk about raising £2bn in new capital through a dilution of the company’s current fully staff-owned structure. This was a change too far: in May a vote of confidence in her leadership was proposed by the partnership council, which she narrowly won, but the long-term effect seems to have been decisive. She will leave in February 2025.

Perhaps Sharon White has discovered that there is an occupational hazard in being brilliant. In some organisations a high-performing leader can be effective without collecting everyone’s views, but at the John Lewis Partnership, everyone I spoke to agreed that the agency felt by people across the business translates directly into the quality of service. Inefficiencies have to be cultivated rather than eliminated; they are the secret of its success.

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