MarketLine Blog

Olympic Champion – John Lewis

 

This weeks Olympic Business Champion Series – a selection of unique profiles analysing companies that support the most powerful sporting event worldwide in 2012 –  this week is focussing on retail giant John Lewis.

John Lewis Partnership is one of the UK’s most well-known and successful retail chains. Whereas most retailers of its scale are owned by shareholders, John Lewis Partnership is owned by its employees via a trust, this is reflected in the structures in place for workplace democracy, and in the annual profit-share bonus given to all employees – and this unusual form of ownership has fostered its successful performance.

Financials for the past ten years show JLP performing strongly, even in difficult market conditions. Without the need to satisfy shareholders, the company is able to maintain long-term plans even if this temporarily affects profitability and staff loyalty, as reflected in turnover rates, is better than average for the UK retail sector. The company has a strong brand, based on quality, service, value, and partnership. This permits it to maintain sales, even when competitors offer cheaper alternatives. However, price competition is an issue, particularly in the UK’s concentrated food retail sector. JLP is responding with strategies such as Essential Waitrose, which attempts to offer lower-priced basic foods without compromising the Waitrose brand identity.

At the end of April John Lewis Partnership announced the launch of official 2012 shops in all its full line department stores and dedicating space to London 2012 in all its ‘at home’ shops. These new London London 2012 shops will showcase up to 3,000 official London 2012 products and give customers across the UK access to official Olympic and Paralympic merchandise. In addition to the nationwide roll-out, John Lewis has also expanded the size of its Oxford Street London 2012 Shop.

Peter Ruis, Buying and Brand Director, John Lewis said: “We are delighted to further our support of the London 2012 Olympic and Paralympic Games with the roll-out of official shops in each of our branches. We have seen strong sales of London 2012 merchandise in our existing London 2012 shops and with the 100 days to go milestone just around the corner, excitement towards the Games is definitely building.”

To understand how an employee-owned business differs from a shareholder-owned business and how the John Lewis Partnership’s ownership model had a beneficial effect on its performance in the UK retail market, click here.

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