The outgoing chief executive of John Lewis has said he remains “optimistic” about the crucial Christmas trading season, despite what he described as a “perma crisis externally” weighing on household finances and consumer confidence.
Peter Ruis, who is due to step down this month “to pursue new projects”, acknowledged that the economic backdrop was challenging as the department store group unveiled a series of investments aimed at strengthening its digital and in-store offer ahead of the festive period.
Ruis said: “I’m pretty optimistic about Christmas.
“The perma crisis externally isn’t going to go away.
“Obviously people still have money but it’s tough out there, isn’t it? I’m someone with graduate and teenage kids. I think I read recently there are 10 and a half thousand graduate jobs compared to 60 or 70 thousand five or six years ago, so a lot of our key customers in their 40s and 50s are worrying about their kids and having them at home.
“There’s a lot of pressures in the economy. There’s a sense of interest rates possibly going up and all sorts of challenges.
“John Lewis sells lots and lots of things and I think you have to be very careful with what you buy. The beauty is that people are still buying really good stuff but it isn’t an economy where you’re going to splurge, when you’ve got that inflation swirling around you.”
Ruis was speaking at the launch of The Box Studio at John Lewis’s Oxford Street flagship store. The facility will operate as a hub for video and social media content in a trial running through Christmas.
The retailer said digital assistants and social platforms had become the fastest-growing ways for consumers to discover products, increasingly displacing traditional search.
About 60 per cent of John Lewis sales are made online, while a growing proportion of its 13mn customers are encountering products for the first time through video content.
Anna Braithwaite, chief customer officer, said the retailer’s long-running Christmas advertising campaign had established its credentials in producing content that consumers actively seek out.
“We have shown every Christmas for nearly 20 years that we can make something people choose to watch.
“What we have not been able to do until now is do it all year round, quickly, and at the pace social moves.
“Customers have trusted John Lewis for a very long time, and that is worth more in this channel than any amount of production.”
The studio’s first project is a vodcast series, Gift List, hosted by Angela Scanlon, featuring celebrities discussing their experiences of giving and receiving presents.
The move forms part of an £800mn multi-year investment programme covering all 36 John Lewis stores as well as its digital channels.
The retailer has also stepped up spending at its Oxford Street flagship, where it opened the 300-seat Platter John Lewis restaurant in August, including an in-house coffee roastery and bar. The site has also gained a new sport and wellness department.
Elsewhere, John Lewis is investing £50mn across five stores this year.
The programme includes a £20mn redevelopment of its Glasgow store, its largest individual shop investment in recent years, alongside projects in Cambridge, Leicester, Reading and Liverpool.
The investment comes as department stores face a difficult combination of subdued consumer confidence, persistent inflation and changing shopping habits.
For John Lewis, the shift towards video-led product discovery offers an opportunity to strengthen the connection between its brand and customers at a time when competition for discretionary spending remains intense.
Ruis’s comments suggest the retailer expects consumers to continue spending through Christmas, but with greater scrutiny of purchases and less willingness to engage in the kind of discretionary splurging that typically provides a boost to retailers during the festive season.
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