John Lewis targets Scots sites in ‘bricks and clicks’ strategy
DEPARTMENT store chain John Lewis is considering further expansion in Scotland as part of a “bricks and clicks” strategy that will further integrate its high street and online operations.
Managing director Andy Street says the company has a number of options, including smaller format At Home outlets.
This year the group has opened four John Lewis stores, all in the south of England. It is now moving north with openings planned for Birmingham and Leeds. The Birmingham site is the biggest single-store retail project in the UK, but many of the new outlets are operating under the At Home brand, which could be used to increase the chain’s coverage of Scotland.
A new At Home store in Ipswich is sharing a site with the John Lewis Partnership’s supermarket brand, Waitrose. Street said the system is a trial that could provide the solution to reaching less populous areas.
Speaking to Scotland on Sunday during a visit to Edinburgh, he said: “The interesting question is where might we do it? We are not going to be able to build a large shop in Inverness, Stirling or Dundee, but we need to make shopping more convenient for customers in those areas.
“At Home acts as a fill-in between catchments. The Ipswich trial is still in its early days but customer reaction has been very positive.”
Waitrose is already in the process of expanding in Scotland, with stores due to open in Stirling and Helensburgh next year. Street said John Lewis was enjoying rampant online sales – up 41 per cent so far this year – and the firm is already increasing staff numbers at its call centres in Hamilton and Glasgow as well as at its three Scottish stores.
The sales rise has been driven by improvements to the website which includes a greater choice of items and a popular “click and collect” service which has made the store network an integral part of the online offering.
Street said the Glasgow centre will hire 20 per cent more staff this year, taking the payroll to 1,000. It is outsourced to customer service specialist Teleperformance and deals exclusively with calls relating to the johnlewis.com site.
Re-focusing on the website means the group’s geographical coverage has increased, allowing it to become an exporter to 33 countries, and is prompting the opening of UK outlets to allow a new wave of customers to pick up purchases in store.
Street said the expansion strategy was based on “bricks and clicks” together.
“Customers want to use the two ways of shopping interchangeably,” he said. “The fastest growing method of fulfilment is click and collect.”
John Lewis has also been trialling the collection of some items bought on its website from Waitrose, which it says has proved popular in Edinburgh’s Morningside.
Street said Britain is now the world leader for online retail, making UK companies “world class” and providing an opportunity to export.
He said he does not expect the sales boom at johnlewis.com to continue at its current rate, but by investing more than ever next year he believes the company can continue to gain market share. He plans to invest £206 million on expansion in 2013 – and he wishes more firms would also start spending their cash too.
“One of the reasons the economy is flat is that businesses are not investing,” he says. “Ultimately our sales are dependant on the UK economy.”
John Lewis has enjoyed year-on-year sales growth of 12 per cent in October and matched that in the first three weeks of November, but will hit tougher comparisons next month as its recent good run of form started in the run-up to last Christmas. Street said he expects “solid, single-digit” growth over the festive period.
The group’s stores in Aberdeen, Edinburgh and Glasgow have all posted like-for-like sales growth of around 1.5 per cent this year. Including online purchases, sales north of the Border increased by around 8 per cent.
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