// John Lewis’ online sales surge 84% since mid-March
// However, due to the impact of store closures, total sales is down 17% in that same period
// Waitrose’s overall sales climb 8% since January 26
John Lewis Partnership has experienced mixed trading since the outbreak of coronavirus, as it warned of further job cuts and a sales slump in the months ahead.
The partnership said its Waitrose supermarket business saw sales jump eight per cent since January 26 thanks to shoppers stocking up on essentials as the pandemic escalated into a crisis and prompted a nationwide lockdown.
Despite the sharp rise in demand both in-store and online, Waitrose said operating costs have increased too, especially as it has to expand online delivery capacity by 50 per cent.
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Meanwhile the partnership’s John Lewis arm saw online sales surge 84 per cent since the middle of March, which was credited to soaring demand for items related to working or living at home like technology and food preparation, exercise equipment, and children’s entertainment.
However, this has not been enough to offset the impact of store closures, with John Lewis’ total sales down 17 per cent year-on-year since the middle of March.
The John Lewis Partnership also confirmed that 14,000 staff have been furloughed across the business due to the lockdown, and that they will receive full contractual pay until the end of May.
Earlier this month it revealed that all non-management staff and first-level managers working through the pandemic in Waitrose shops will receive a one off bonus of £200.
Meanwhile the John Lewis Partnership executive team, non-executive board members and independent directors all agreed to a 20 per cent pay cut for the next three months.
However, the company anticipates “significant sales decline between April and June, and weak sales thereafter” and was planning for a “worst-case scenario” of full-year sales plunging 35 per cent at John Lewis and a “more modest decline” of less than five per cent at Waitrose.
The partnership also warned on further job losses after making 1200 staff redundant in the last financial year, and said the strategic review of the partnership announced in March will now be accelerated with the aim of being “substantially complete” by summer.
It added that the businesses needed “to reassess these future plans and the achievable timescales due to the impact of coronavirus”.
“We are confident that the future of the business is strong,” John Lewis Partnership chair Sharon White said in a letter to staff.
“Our short-term trading has though been significantly affected, principally because of the closure of all 50 John Lewis branches.
“The Partnership has been trading for nearly a century. It has survived a World War and bombings, economic crashes and crises.
“Thanks to you, we shall also come through Covid-19 and emerge stronger.”
The John Lewis Partnership said it started the financial year with just over £900 million cash and investments in the bank and with access to a further £500 million of undrawn committed bank facilities.
Six weeks into the crisis, the company said it was “holding broadly the same level of cash and investments”.
However, with “such unprecedented trading volatility” it has undertaken a range of actions to help secure the partnership’s financial sustainability.
This includes lowering planned stock intake in line with slower trading in John Lewis, slashing marketing spend by close to £100 million and other reductions in operating costs, and reducing capital and investment spend by £200 million.
The partnership said it would save around £135 million this financial year due to the one-year business rates holiday announced by the government last month, and the deferral of VAT payments until March 2021 would help with short term cash flow.
John Lewis Partnership said it was also negotiating with landlords regarding rent relief, including an immediate switch to monthly from quarterly payments, and was working with banking partners to consider how extra flexibility can be provided, should it be needed.