It’s difficult to describe how most feel about John Lewis. I don’t mean their gorgeous stores or brilliant staff; I’m talking about their very different business model of employee ownership.
Well, with pre-tax profits up 28% to £110m for the six months to July 31 they’re the envy of the high street this autumn. John Lewis online is their single biggest outlet (larger than their flagship store in Oxford St.) and it was up 36%!
Many put this growth down to their price matching policy of never knowingly undersold. Dixons hit them hard on prices last autumn and they struck back with their own marketing campaigns.
The most interesting thing about this policy is that John Lewis have only recently changed tact and taken it online when it only applied in store previously.
A) This really reflects the pricing problems facing retailers today;
B) It shows they are incredibly serious about online growth.
Of course the bigger question is whether these constant price reductions are forcing retailers to a race to the bottom? Are consumers being educated to wait for sales? How do you communicate your added value with branded products at reduced prices?
Answers on a postcard please…