Newly appointed John Lewis Partnership Chair Sharon White has truly had a baptism by fire during her first two months in charge, as she attempts to steer the already struggling retailer through the tumultuous waters of Covid-19. Today the potential impact has been explicitly quantified, with the Partnership announcing (alongside the 2020 annual report) a worst-case scenario of a full-year decline in sales of 35% at John Lewis and 5% at Waitrose (despite an 8% increase in sales at the latter since the end of January).
Waitrose identifies unsurprising categories as in high demand, concurring with GlobalData consumer data across long-life ambient goods (such as rice, pasta, long-life milk and home baking), frozen foods and household products. While we expect demand to lessen following the panic buying in late March (and as grocers implementing queuing systems and other restrictions to improve shelf availability), Waitrose – alongside its supermarket rivals – will need to ensure that there is procedure in place in the event of a lockdown extension, or (more worryingly) a secondary rise in UK COVID cases.
Growth in home delivery is also now an even more prominent pillar of Waitrose’s strategy for success. Following on from 13% growth in Waitrose.com for the year ending January 2020, it has increased fulfilment capacity by an impressive 50% over the last 12 weeks, and has plans to open a new customer fulfilment centre in Enfield next month. This is much needed, with 19.0% of all UK shoppers currently spending more on food online than before Covid-19 measures were introduced. And with Waitrose’s divorce date from Ocado unchanged (1st September this year), Covid-19 appears set to be a (albeit unwanted) catalyst for Waitrose’s long-term online business.