UK: John Lewis issues caution despite recent form
John Lewis Partnership has expressed satisfaction at its results to be announced imminently, although cautions of a tough year ahead.
Addressing today's (3 March) Retail Week conference, John Lewis chairman Charlie Mayfield noted his group's healthy results were in large part due to sales in the last of quarter of 2009 being “up significantly” on the previous year.
“I am very pleased with our results – we will have a good set,” he said, although he warned the UK economy was “in a bit of a false dawn I am afraid to say”.
The JLP chairman conceded momentum from Q4 had carried through to the beginning of this year, but noted a post-general UK election period could herald the imposition of further tax and interest rate hikes.
Such a scenario – designed to address the UK's crippling borrowing requirements following “a truly grisly time” according to Mayfield – coupled with a fall in disposable income and potential government spending cuts – could all adversely affect retail activity.
“The world has changed and what we need to do is get real – it will be a different climate,” added Mayfield. “Re-balancing the economy will take ten or twenty years and will take a great deal of political foresight. There will be some bumps.”
Mayfield reiterated his mantra that “best products at best prices” would generate improvement although noted high levels of like for like growth “looked bullish.” A slowing economy would also accelerate the use of online technology.
John Lewis has been in the headlines recently for its much-vaunted system of co-ownership and Mayfield expressed himself “delighted” at the interest shown up to the highest political levels but insisted it was “not an easy option and not a panacea”.
“It is about giving people a sense of control. What we work hardest at is establishing a culture of partnership to make the business better every day. If you can galvanise that, the power is enormous.”
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