John Lewis' chief Andy Street talks about expansion plans and why Scots shoppers are lagging the UK

IF THE burden of recession has put Andy Street under pressure, the managing director of the John Lewis Partnership looks as if he would relish the challenge anyway.

A compact man in a neat suit who bristles with energy, Street has spent a 25-year career at the retailer that is a little ravaged by economic hard times but still maintains the benchmark of the British middle-class ideal. Despite rising joblessness and fears of the dreaded double dip, the middle classes are still buying their tights and their saucepans at John Lewis.

Street reports that across the UK, sales performance has been holding up well. In the half year to July, sales were 13 per cent up on the previous year, although non-food sales were up a more modest 2 to 3 per cent.

"We have had a decidedly good end to the recession and we have come out of it in robust shape," says Street.

But in Scotland, sales have been "trending below" the partnership's UK performance. In June, the Scottish Retail Consortium reported that fears about impending job sector cuts saw spending on non-food items drop by 2.1 per cent. But across John Lewis's three Scotland stores, sales have been "just level" in recent months, while sales are still up 3 per cent on the same period in 2009.

Barry Matheson, the head of both the Edinburgh and Aberdeen stores, says: "Scotland is lagging the UK coming out of the recession."

Street points out that if online sales are counted, Scottish shoppers have boosted sales overall 7 per cent on last year.

It seems as if Scots have taken to buying something online and picking it up at the store, or taking advice at the shop then buying online later and having it delivered.

"It is just how people are choosing to use the different channels," says Street. "It is the convenience. We are trying to make it as easy as we can for people to shop in the way they choose."

Last year, John Lewis decided to take on the likes of online fashion powerhouses such as Asos.

Under fashion director, Peter Ruis, John Lewis made a move from its usual "capable but dull" online offering and introduced fashion labels such as Oasis and Ted Baker. Ruis has since been promoted to the board and is now the firm's overall buying director. According to Street, the introduction of new fashion brands online has had a "huge impact".

"The number of products to choose from online has gone from 65,000 to 120,000 and by Christmas there will be 180,000 unique products online.

"That is a very big difference. Fashion sales online are up 300 per cent on last year."

In March, Street featured in a three-part BBC special titled Inside John Lewis, where he was pressed to admit that the John Lewis model was "too costly... the recession has revealed this fact."

Yet the firm continues to expand. Recently it invested 40 million in a new location in east London, a four-storey, landmark building anchoring the Stratford City shopping mall, which will become the ninth largest shopping centre in the UK and looks across to the Olympic stadiums. John Lewis is the official department store provider for the Olympics 2012.

Last week, Street pledged to open a John Lewis department store in Birmingham - the only "regional capital" that is bereft of a branch of the middle class emporia. However, the nearby Solihull store tends to benefit from Birmingham's loss, where sales were up 13 per cent on last year.

Initially, the firm had a plan to open "ten department stores in ten years" but this has been derailed by the recession. Stores have opened in Cambridge, Cardiff, Leicester and Liverpool.

Next the retailer intends to focus on smaller format stores specialising in electronics and white goods: John Lewis At Home.

One outlet has opened in Poole, Dorset, and there are plans to open this year in Croydon, Swindon and Tunbridge Wells.

But while he stresses that it is a case of "never say never", Street says there are "no plans" to open further stores in either Dundee or Inverness. Depending on the success of the smaller, at home model, he says one may open in Scotland eventually.

"The truth of the matter is, those [Aberdeen, Edinburgh and Glasgow] are the three regional economic powerhouses and we have got good businesses in each of them. ."

In the five years before the recession, Street says the Aberdeen store was one of the top performers in the group with the biggest growth in sales. Last year the group expanded the store. In Edinburgh, the company has invested 750,000 in its newly remodelled beauty hall.

"Despite the recession being tougher in Scotland than in England, we have grown our trade and that leads us to be very confident for the three businesses.

"We are going to continue to invest in all three, and hopefully grow our number of partners in well," he says.

In June the company opened a call centre in Hamilton. The move was partly a cost cutting measure - amalgamating individual call centres in stores to centralised centres in Scotland as well as in Manchester. By Christmas the Glasgow-based call centre will employ 250 and Street confirms this will expand to 450.

Street insists it was not the size of the 700,000 grant handed to the John Lewis partnership when it came to choosing a Scottish location. "Obviously Glasgow was in competition with other UK cities for that call centre. But we chose to go there largely because of the quality of the people we knew we would get there.

"It [the grant] made a difference compared some of the cities in the Midlands particularly, but it was not the deciding factor. They are honestly not big enough to make the difference in an economic decision."

But John Lewis staff are lucky compared to other low-paid members of the retail profession. John Lewis is employee-owned, its staff are referred to as "partners" and Street's boss, chairman Charlie Mayfield, is paid no more than 75 times the pay of the average shop-floor worker. In addition to this, John Lewis still runs one of the few final salary pension schemes in the private sector and Street says this will remain.

As a result of the "surprisingly robust" sales in the run up to Christmas, John Lewis staff also enjoyed a 15 per cent bonus equivalent to seven weeks salary in March. And employees have voted with their feet. About 700 a year across the group celebrate 25 years of working with the same employer.

All staff, once they reach 25 years get a six months sabbatical. But Street, who describes himself as a "lifer", won't be taking his sabbatical when he reaches his 25th anniversary in September,

"I now need to be retired," he jokes. "The problem with 25 years is you are no longer employable anywhere else."

It also seems as if Scots partners are keener on the benefits of mutuality than their English and Welsh counterparts. In its annual survey of its employees, Street reports that Scots are more pleased about working for John Lewis than they are anywhere else in the country. Street says this has something to do with the Scottish psyche. "I would describe it as revealing a more collaborative psyche than some other areas of the country. There is definitely in those results a resounding commitment to the partnership model. Definitely."