John Lewis will cut prices and could close more stores in a £1billion plan to revive its fortunes.
The department store will launch a homeware range and introduce ‘more affordable’ budget ranges to counter the perception that it is expensive.
It said the move would ‘broaden our appeal to more customers’ when shoppers are ‘especially cost-conscious’.
The partnership, which now has 42 department stores and 335 Waitrose supermarkets, will also cut costs by £200million by 2022, on top of £100million of savings announced last year.
Bosses refused to rule out shutting more stores after the closure of eight John Lewis sites during lockdown, with 1,300 jobs lost.
New direction: Dame Sharon White, who took over as chairman in February, will invest £1billion over five years to return the company to profit
The firm reported a mammoth £634.6million loss in the six months to July 25, leading it to cancel the coveted partnership bonus for the first time since 1948. The value of its department stores took a £471million hit as the pandemic forced shoppers online.
Dame Sharon White, who took over as chairman in February, will invest £1billion over five years to return the company to profit – and laid down a target of £400million by 2025.
It will spend £400million on new areas such as financial services and ‘affordable’ rental accommodation, with more cash going into its online business.
Bosses want online sales to make up between 60 per cent and 70 per cent of department store revenues, up from 40 per cent before the pandemic, and up to a fifth of its food business.
Food delivery capacity at Waitrose is being increased to 250,000 orders per week, and John Lewis is expanding the number of places customers can pick up online orders to 1,000 locations. It has applied for planning permission as part of efforts to enter the ‘affordable’ rental accommodation and it is testing furniture rental.
Some £100million has been put aside to grow financial services and it is considering a move into horticulture and garden design.
White hopes new services will contribute 40 per cent of overall profits by 2030 and reduce its reliance on retail.
Its department stores will place more emphasis on homeware, items for children’s nurseries and home technology.
The company also pledged to go carbon neutral by 2035, halve its food waste by 2030 and recruit people coming out of the care system.