What the Impressive John Lewis Half-Term Trading Week Really Shows

The company achieved revenues of £82.2 million during the John Lewis half-term trading period, a rise of 11.5 percent compared to the previous year’s sales. Although it is assumed that an increase in football activity during the half-term week is the cause of the uptick, the rise occurred approximately a week or so later than in 2015, when it usually happens.

It was claimed that John Lewis had experienced a relatively high increase in sales across three different product categories, with EHT standing out as the strongest performer with a 17.1 percent increase. Even though several products in other categories, such as Textiles and Gifting, did quite well throughout the week, sales of home products nevertheless managed to post a respectable 7.7 percent increase. The week was also successful in the haberdashery sector, with sales of sewing machines, for example, increasing by 21 percent in comparison to the same period in 2015 as a direct result of the broadcast of the Great British Sewing Bee on BBC 2.

The nicer weather did not go unnoticed, and many people took advantage of it, which was reflected in an increase of 45.4% in sales within the outdoor living section of the store.

The effect is known as the “Old Man on the Moon.”

Of all, the weekly trading sales during the half-term couldn’t possibly tell the complete story. John Lewis is not an example; other firms, including John Lewis, have had to go the extra mile throughout the years to reach the maximum number of customers who purchase online. The “Man on the Moon” advertisement that John Lewis ran was one of the more prominent ones used to promote this cause. It was a success since it fulfilled its stated aim, which was demonstrated by the surge of shoppers who visited its website; Christmas sales increased by 5.1% compared to the prior year.

The video production took approximately one million dollars and cost an additional six million dollars to secure airtime on television. The length of the film is about two minutes. It told the story of a young girl, perhaps six years old, who wanted to deliver a message to an older man who lived alone on the moon. The money was well spent considering the ad’s success as John Lewis Christmas sales in 2015 were revitalised, trouncing the 2014 production with an additional 23,000 mentions on social media within its first 120 minutes of life. Within its first 120 minutes of life, the ad received another 23,000 comments on social media. The mentions of “Monty the Penguin” reached 14,000 within the first day or 24 hours of his life within the same period, which marked a striking difference from those of “Monty the Penguin.”

The department store raked in a total of £951 million in sales over the crucial Black Friday and during the post-Christmas and Christmas business period even though the in-store performance wasn’t extremely outstanding or exceptionally hard-hitting, however, given that the store could do so.

Reliance on users of the internet

John Lewis placed significant reliance on web-based sales, which stood at 21.4% despite a 1.2% decline in in-store sales. Within six weeks, the company’s sales dropped by 1.4% even though it partnered with Waitrose, a well-liked retailer among middle-class consumers.

Within the six weeks after Christmas, combined sales for the John Lewis group increased by 4.1% to around 1.81 billion pounds. This gain was driven by growth at Waitrose. The data provided by the company suggested that the number of people shopping in physical stores had decreased in 2015 because most consumers continued to become more comfortable making online purchases. In fact, during that period, the company’s website accounted for forty percent of its revenues.

Regardless of the considerable adjustments in the non-food market regarding trade patterns and the issues ailing the grocery industry, the John Lewis Partnership had a notable Christmas season in terms of its robust trading, which was exceptional for the Christmas period. In contrast to the previous year’s total of £342.7 million, the partnership’s anticipated annual profits were the same as before, coming in at between £270 and £320 million.

Outperforming rivals

The capacity of John Lewis to adapt to changing circumstances and surpass its competitors is one of the company’s most notable qualities. This has been the case for the company for the past six years, and the primary reason is that it provides a solid online offering. This includes modern stores, emphasising the South East region of England, which is more prosperous. Consequently, sales of mobile devices such as tablets and smartphones have climbed by around one-third, with most customers falling increasingly in love with click-and-collect services, which registered a gain of 16% over the previous year’s numbers. John Lewis’s click-and-collect service accounts for around half of the company’s orders.

At the same time, almost one-third of the web-based orders placed with John Lewis was picked up at one of the many Waitrose locations where the company collaborates. However, that was not the end of the story regarding sales at department stores. During the same period, the retailer witnessed an increase in sales of approximately 5.1% in home products, while sales in fashion and technology, respectively, saw increases of 6.1% and 9.6%. The management of the business claims that if the weather had been more favourable, the store’s success in terms of fashion would have been significantly greater.

It is anticipated that low prices will significantly enhance sales. According to the Shop Pricing Index compiled by BRC-Nielsen, overall pricing levels in retail establishments had decreased by 2% by the end of December 2015, down from 2.1% in November. The reduction in prices will almost certainly work in John Lewis’ favour. Retailers are expected to keep investing in price and continue to offer competitive prices on various goods. Prices may continue to reduce over the medium term, given the severe competition characterising the business. Perhaps this explained the group’s trading display of 82.2 million pounds during the first part of the week.

The annual deflation rate for food stayed unchanged at 0.3% compared to the rate reported in November 2015; nevertheless, the yearly deflation rate for non-food items reduced to approximately 3% from about 3.3% when registered in November. This was primarily caused by several price drops across various categories, including hardware, gardening, do-it-yourself (DIY), electrical, footwear, and clothing. Other commodities within the retail segment of the supply chain, such as oil, have experienced significant price reductions. It was anticipated that this impact would continue to affect prices at the store for an extended period.

According to BRC-Nielsen, the deflation levels seen over the entirety of the retail business in 2015 were predicted to continue at least into the first six months of 2016. As a result, the increase in sales of 82.2 million pounds is impressive when viewed from this viewpoint, which maybe tells the tale of the remainder of the second half of 2016.

It would appear that non-food retailers, such as furniture buyers, were planning to continue utilising price reductions and making the most of targeted promotions in 2016, as was initially anticipated.