Thursday 22nd Oct 2020 - Logistics & Supply Chain

Sales boost for John Lewis in ‘Logistics Christmas’

Online sales at John Lewis were up 19 per cent on last year in the five weeks to 27th December, driving total sales growth of 5.8 per cent to £777m.  Managing director Andy Street said: “With Black Friday driving a higher proportion of online sales and customers increasingly wanting more convenience, this has meant a real concentration on fulfilment, making this a truly ‘Logistics Christmas’.”

While Christmas 2014 was successful for John Lewis, insolvency specialist Begbies Traynor has warned that the level of  “significant financial distress” among retailers has risen 54 per cent on last year.

And the KPMG/Ipsos Retail Think Tank warned that the rise in online shopping is pushing up retailers’s overall cost-to-serve and will affect profits without significant sales growth.

The week of Black Friday (28 November) was the biggest for sales in John Lewis’s 150 year history – up 22 per cent on last year, with experiencing a 300 per cent increase in traffic during the early hours of trading on Black Friday itself.

Andy street John Lewis“The investments we have made and the new capabilities we have built in recent years in distribution and IT have been fundamental in ensuring we successfully navigate this changing shape of trade,” said Street.

Online sales represented 36 per cent (versus 32 per cent last year) of total John Lewis sales during this period. Click & Collect delivery accounted for 56 per cent of online orders being collected in shops, overtaking home delivery this Christmas.

Sales in shops for the five weeks remained level with last year. However, the retailer said the importance of shops in the omni-channel journey was confirmed as a place of inspiration and customer collection.

“Our shops continue to have a critical role to play in the omni-channel shopping journey, and will be a major development focus for us over the coming months,” said Street.

“To that end, we will be opening two further ‘At Home’ shops in Horsham and Basingstoke in 2015 as well as our new regional flagship in the heart of Birmingham in September, which will set an exciting new benchmark in bricks and mortar retailing.”


Insolvency specialist Begbies Traynor has warned of a 54 per cent increase in “significant” financial distress among retailers in the run-up Christmas compared to last year.

“Black Friday was lauded as the biggest day of retail sales this year, but it seems the only real winners were the largest online retailers and big brand high street chains with the biggest discounts and best online offerings, such as Amazon and John Lewis,” said Julie Palmer, partner and retail expert at Begbies Traynor.

“In a bid to compete, the rest of the UK retail industry has been forced to slash prices and profit margins, but unfortunately sales volumes have failed to keep pace as Christmas shoppers across the UK have been particularly thrifty this year, taking advantage of the significant discounts on offer.”

Research covering the period from 1st October to 17th December 2014 by Begbies Traynor found that  24,251 retailers were suffering ‘significant’ financial distress, compared to 15,792 businesses at the same stage last year; a huge increase in distress of 54 per cent.

Food and clothing retailers were two of the worst hit groups, experiencing increases in ‘Significant’ distress of 70 per cent (Q4 2014: 3,819 vs. Q4 2013: 2,243 businesses) and 123 per cent (Q4 2014: 1,482 vs. Q4 2013: 666 businesses) respectively.

However, levels of more severe ‘Critical’ distress decreased slightly by 10 per cent from 150 retailers in Q4 2013 to 135 businesses this quarter, as the last minute shopping rush before Christmas artificially boosted sales, bringing a small number of the UK’s least stable retailers back from the brink.


The rise on online shopping is pushing up retailers’ overall cost-to-serve, and will affect profits over the next 12 months unless retailers achieve decent sales growth, according to the KMPMG/Ipsos Retail Think Tank.

Mark Teale, head of retail research at CBRE, said: “Online sales growth has exacerbated profitability problems because of the inability of many retailers, particularly in grocery markets, to claw back the full cost of fulfilment from online shoppers. Margin dilution is the inescapable result of this pressure. Online has proved brilliant at capturing sales; its record as a profit generator is much less impressive.”

And Richard Lowe of Barclays, warned: “Retailers need to have a robust IT platform that will work smoothly across all channels and can withstand spikes in demand, such as Black Friday or Cyber Monday.”

The think tank argues that retailers will need to spend more in 2015, to remain competitive and catch up with consumers’ evolving shopping habits. “Evolving technology offers more opportunities to personalise and innovate services, enabling retailers to respond quickly to changing consumer shopping habits.”

Looking at the overall retail market, David McCorquodale, head of retail at KPMG, said: “2015 will see some growth, but retailers will do well to break through the two per cent barrier. There are multiple factors which could knock sales off course, including concern around the general election and an interest rate rise.

“There is undoubtedly growth coming through online sales, but this is a double edged sword. Online sales have a higher ‘cost to serve’, putting even more pressure on retailers’ margins.”

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