John Lewis’s chief executive has called on whoever wins the general election to deliver a stable environment for economic growth that allows consumers to spend with confidence.
Speaking as the John Lewis Partnership reported its first full-year profit since before the pandemic, Nish Kankiwala told Sky News the political and economic turbulence of recent years had damaged consumer confidence.
“There’s no doubt that the last few years have been tough for families, with inflation, paying the electricity bill, mortgage rates have gone up. Now, we have enjoyed a growth in our customers despite that environment.
“My ask from a broader perspective is that we have stability. That makes such a big difference to customers buying big ticket items, or even the day-to-day. That would be my request.
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“I think encouraging growth is important for our economy, along with stability so customers can make those decisions in an environment where they trust the next year is going to be similar to this year, and I don’t think we have had that in years just recently past.”
The comments, from the boss of former prime minister Theresa May’s favourite shop, reflect a broadly held sentiment in business that the election offers a chance to reset the economy after the volatility and uncertainty of recent years, exemplified by the chaos of the Liz Truss mini budget.
Mr Kankiwala said the return to profit at the group, which comprises John Lewis stores and Waitrose supermarkets, was driven by an additional one million customers across the two brands, and higher margins on sales.
Despite recording a £42m pre-tax profit, there will be no bonus for the 76,000 staff, known as partners, of Britain’s largest employee-owned company, the third year in four that no bonus has been paid.
Mr Kankiwala said partners would receive the company’s largest ever pay rise, with up to two-thirds seeing an uplift of more than 10%, and that pay, and investing in the business, was a shared priority.
“In the year that I have been CEO it has been very clear to me that they want a long-term future for the partnership, that they want us to invest in the business, that we have the shops that look right, have the technology that we need and focus on pay,” he said.
The partnership includes Waitrose supermarkets as well as the John Lewis department stores. Pic: JLP
Mr Kankiwala would not rule out redundancies but insisted there was no formal target for headcount reductions following reports John Lewis is considering shedding up to 11,000 staff in the coming years.
“We’ve got a very clear plan for growth and it is working this year. New customers are coming through our shops, we’re growing margins and growing profit and that is what’s delivering.
“So there are no numbers, no parameters on any of those things [redundancies]. Fundamentally it is about delivering growth. We have got a plan that delivers growth, that delivers growth for partners and business and we will continue to review that.”
Mr Kankiwala has been in post for a year and before his second is out the current chair, Dame Sharon White, will have left having decided to depart after just a single five-year term in the job.
Dame Sharon’s plans for John Lewis included diversifying the brand, with projects including build-to-let homes and a target of 40% of profit coming from non-retail sources.
Mr Kankiwala confirmed that target has now been abandoned in favour or an “unashamed focus” on retail.
“The environment over the last few years has changed dramatically,” he said. “When it was set in 2020 interest rates were much lower, we didn’t have the high inflation, and fundamentally we don’t want to have a target for that because we are focusing on retail.”
He also insisted Waitrose and John Lewis would remain part of the same group. “We’re a partnership, two great brands. And they stay together.”
