John Lewis: Accelerating investment in our brands ‘is working’

John Lewis has credited its loyalty schemes and varied marketing mix for driving increased sales and record customer satisfaction.

Customer satisfaction hit its highest recorded level in the 26 weeks to 26 July, as both Waitrose and John Lewis “outperformed their respective markets”, with customer numbers up 4%.

“We know our transformation is ongoing and there’s a lot more to do, but with two incredible brands that have clear headroom for growth, we are confident that our strategy is the right one and our customers will continue to respond positively to our investments,” chairman Jason Tarry told investors today (11 September).

Partnership sales grew 4% year-on-year over the period to £6.2bn, with total revenue up 5% to £5.4bn. Despite reporting a loss before tax and exceptional items (LBTBE) of £34m for the first half, Tarry acknowledged the company is a “half two weighted business” and is on track to reach profits in the run up to Christmas, despite a “challenging macroeconomic environment”.

Tarry claimed the retailer’s “clear focus” on accelerating investment in customers and its brands “is working”. He added that such investments have helped build momentum over the first half, delivering growth in sales, customer numbers, loyalty and satisfaction.

Waitrose sales surpassed £4bn in the first half for the first time, driven by a 6% increase in sales to £4.1bn and a 3% rise in volumes. Some 9% more customers are shopping with Waitrose compared to two years ago.

John Lewis also saw sales increase 2% to £2.1bn, with the group claiming to have attracted more customers through its “commitment to offering quality, style and value, which has resonated strongly”. The retailer credited its “sharpened focus” on the customer proposition for driving growth.

With two incredible brands that have clear headroom for growth, we are confident that our strategy is the right one.

Jason Tarry, John Lewis

Key developments include newly refurbished stores, the roll out of omnichannel shopping options and the return of the Never Knowingly Undersold price promise after a two-year hiatus, which celebrates its centenary this year. So far, John Lewis has matched more than 300,000 prices on branded products in the last year.

John Lewis managing director Peter Ruis told Marketing Week the attention placed on advertising and partnerships has been beneficial for the business and there has been a “huge focus” on brand assets. Ruis claimed the launch last week of new campaign ‘Tableau’ celebrating 100 years of Never Knowingly Undersold has been “hugely successful”.

“Second year running in that we’ve had two big film driven ads that, of course, go into every single channel, digital, physical, out-of-home, etc. So that continues and we’re also investing in new things,” said Ruis, citing the second edition of its magazine, ‘Foundation’ focused on the home market.

He also said partnerships, for example with online lifestyle magazine Sheer Luxe and marketing campaigns with “big hero brands”, including Apple for the launch of the iPhone 17, are ways the brand strategy is evolving. John Lewis is conducting a “special marketing programme with Apple”, which will include takeovers of London stores.

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Ruis described in-store investments as often the retailer’s “greatest piece of marketing”.

“When you have six new beauty halls and you have great brands like Fenty arriving, it’s just great. Creates great engagement with customers and excitement, and really talks about the brand,” he added.

According to Ruis, John Lewis is said spending less on paid search because “the success of Never Knowingly Undersold” had “pushed” organic search, allowing the business to invest more in digital brand assets. 

Last month, former marketer Dom McBrien was appointed to the newly created role of chief digital and omnichannel officer. He starts on 1 October on the same day as incoming chief customer officer Anna Braithwaite.

Heading into Christmas, Ruis said the retailer’s Lego Santa experience bookings have tripled compared to the same point last year and visits to the online Christmas shop are up 200%.

‘First step in a brilliant direction’

Loyalty schemes continue to be a focus for the group, particularly following the release of the ‘Little Treats’ Waitrose scheme. As part of the scheme, treats are offered to My Waitrose customers, such as free hot drinks and personalised vouchers, in addition to existing loyalty benefits.

Over the 26 weeks to 26 July, My Waitrose overall grew 6% in terms of customer numbers, with My John Lewis up 13%.

On the success of Little Treats, Waitrose MD James Bailey told Marketing Week that while the scheme has only been tested in 18 stores, the response has been “overwhelming”.

“Our customers are loving those moments when partners could share something with them. We’ve only been going about a week and a bit, but we’ve already had 4,000 free things given out to our most loyal customers just to say thank you and appreciate their business,” said Bailey.

“We’ve got high hopes for how Little Treats pans out, and, as we roll out into Christmas, the impact it will have on our customer loyalty. So, for us, Little Treats is the first step in a brilliant direction for My Waitrose.”

He added that the mission to “transform and modernise” the Waitrose business continues to deliver results.

On the proposed pan-partnership loyalty scheme, first announced in 2023, Tarry said the brand is “building a platform” across the partnership and “adjusting to suit the missions and needs of the customers in both brands”.

“That’s why we’re doing that first with Waitrose and we think that’s the right path forward, and early signs are promising,” he added.