John Lewis managed to win over Christmas shoppers thanks to its impressive website, but its sister brand Waitrose failed to entice enough customers to beat last year’s festive sales figures.
The department stores chain enticed fewer shoppers through its doors, with like-for-like shop sales down by 3 per cent, but it was boosted by a 21.4 per cent increase in online volumes.
Total sales were up by 6.9 per cent at £951.3m, which was better than anticipated.
Online shopping at John Lewis now accounts for 40 per cent of all sales, despite the introduction of a fee for click-and-collect customers.
Andy Street, the managing director of John Lewis, said: “The obvious online strategy was right and helped with the growth. But you can’t look at each part of the business in isolation because half of all orders are click and collect, so we still need our stores, which should be cherished.”
Street said the level of discounting on high streets in the six weeks to 2 January was highest he had seen. In the week before “Black Friday” on 27 November, John Lewis was forced to revise prices three times as much as usual to remain competitive with rivals under its “Never Knowingly Undersold” pledge.
Despite the unusually warm weather, which dampened sales at rival Next over the festive period, John Lewis saw its fashion business become its second-best department. Mr Street said: “Obviously, the weather affected us but we still outperformed the market.”
Over at Waitrose, sales were less impressive for managing director Mark Price’s final Christmas with the store before he leaves in April. Sales fell by 1.2 per cent to £859.8m, suggesting that either more people were heading to Sainsbury’s, which has been trying to entice Waitrose shoppers by pushing higher-quality goods, or shoppers cut back on extravagances and headed to Aldi and Lidl instead.
Analysis
Iain Devine, Commercial Director at digital consultancy Salmon, said: “It is evident that the 2015 peak period was a pivotal moment for online sales, with John Lewis being the latest retailer to announce a surge in sales through digital channels, with online sales accounting for 40% of its business during the Christmas period. Mobile and online shopping are no longer just part of the ‘multichannel’ mix but the focus of it.
“For retailers who saw online success over the period, this is a reflection of ensuring they were prepared with strong online operations for the influx and were ready to make the most of the opportunity. The most successful retailers are those that planned their online peak operations strategy, briefing relevant departments to ensure all online trading and operations teams could anticipate surges and were ready to react.
“John Lewis has embraced multi-channel and all its aspects, making it a seamless journey from the initial stages of research, to the point of sale and click and collect. For other retailers to reap the rewards of their online channels, those who are seamlessly aligned from front-end to back-end, will be the ones to triumph in 2016 as mobile and online shopping continue to grow.”