John Lewis Partnership Shuffles The Pack Amid Losing Hand

Middle England — that bellwether of the U.K.’s consumer likes and dislikes — has fallen out of love.

Where once department store John Lewis could do no wrong with its heart-string pulling Christmas ads and its renowned customer service, now it has given up on its promise to “never knowingly be undersold”.

And its partner in retail, supermarket Waitrose, has been brought crashing down to earth by a cost of living crisis which is squeezing the pips for even its well-heeled customers, who have eschewed their flirtations with its upscale provenance as they watch their weekly grocery bills skyrocket.

In response, John Lewis Partnership, the owner of both John Lewis department stores and upscale grocery chain Waitrose, is shaking up its management team and putting at the helm a man with plenty of brand experience but little retail pedigree.

The same could be said of his chair, Sharon White and, for JLP, it’s a big gamble in a high stakes game.

After all, until very recently, John Lewis was the department store anchor that every mall wanted and the arrival of a Waitrose announced that the gentrification of an area was complete. Partners also enjoyed a famous bonus annually.

JLP Shuffles Management

In response to an alarming decline in results, John Lewis Partnership has appointed its first group chief executive. Nish Kankiwala is a former Hovis [famous for its bread] and Burger King executive who since April 2021 has been a non-exec director at the John Lewis Partnership.

He will take up his new role March 27 just as the staff-owned partnership is set to announce only its second ever full-year loss, with workers expected to miss out on that famous annual bonus for the second time in three years.

The group is widely expected to report an annual pre-tax loss before one-offs of just over $60m, compared with a profit of $219m last year, largely thanks to poor trading at its Waitrose supermarkets and, say some analysts, strategic missteps.

Notably, Waitrose’s Essentials budget range was introduced during the credit crunch in 2009, designed to help the chain hold on to price-sensitive shoppers. However, the retailer only recently upped advertising of Essentials alongside $120m of price cuts, suggesting it may have moved too slowly and could have lost shoppers to discount rivals.

Amid the results turmoil, the management team has also seen some high-profile departures.

Department store head Pippa Wicks unexpectedly left last month and was replaced by retail director Naomi Simcock. Meantime, the head of Waitrose, James Bailey, is under increasing pressure after an alarming sales slump.

Small stores – for both Waitrose and John Lewis – have been talked about as the potential future but with the sudden exit of Wicks, the architect of smaller John Lewis outlets, it’s not clear if this plan will continue. More concessions in Waitrose might be one way forward, but they are hardly a game-changer.

John Lewis has also pushed ahead with private rental apartments above Waitrose stores and other real estate as a new revenue stream and struck a $600m deal with investment giant Abrdn for 1,000 new homes. However, this is a completely new venture for the business.

All Change At The Top

Simcock and Bailey had reported directly to partnership chair, Sharon White, but will now report in to Kankiwala along with five other directors including finance director, Bérangère Michel, and Zaka Mian.

The latter joined as transformation and technology officer in November and has also taken over some of the responsibilities of chief operating officer Andrew Murphy, who is due to leave this summer.

Of Kankiwala’s appointment White said: “The new structure allows me to focus on the preservation of the partnership model and our distinctive character, on the strategy for the partnership and our big commercial choices.”

Born in Mumbai, India, Kankiwala was educated in the U.K. and started his career with UnileverUL
, working in Europe and the U.S.

He went on to become president of Pepsico’s soft drinks business in Europe and Africa and then of Burger King’s international operations before driving the turnaround at Hovis and negotiating its sale to private equity group Endless.