Earlier this week, John Lewis announced several senior management changes including the promotion of marketing director Craig Inglis to the new position of customer director.
Speaking to Marketing Week on a call following the results announcement, Mayfield denied the move was part of a wider trend which has seen the likes of Asda, Tesco and British Airways scrap the CMO title for a customer director. He said the change in approach on marketing is enabling the business to “better serve customers”.
“The root cause of Craig’s change is the continued move to omnichannel within the business and ensuring John Lewis is organised to deliver against the changing ways the customer is choosing to shop,” he said.
“Our shopper is thinking about the business as an end-to-end experience, irrespective of the part of the business they interact with.”
Charlie Mayfield, chairman, John Lewis Partnership
“The changes to Craig’s role – and he’s done a fantastic job leading our marketing and that will continue – will ensure he is critiquing every aspect of our customer experience to the board.”
With M&S continuing to move its food and GM departments under the same advertising messaging, an industry source recently told Marketing Week that John Lewis was similarly planning to combine its messaging with Waitrose in future campaigns.
Mayfield, however, denied that was the case.
“John Lewis and Waitrose are subtly different in how they trade and both brands are perusing separate marketing campaigns very effectively,” he responded.
“Having said that, we are moving to collaborate the two brands more frequently, just not on advertising.”
Profits take a hit
Despite the decrease in profitability, the John Lewis Partnership’s revenue rose 1.9%. At John Lewis, there was a 3% rise in like-for-like sales. However like-for-like sales at Waitrose fell by 1.3%, its first drop in seven years.
Mayfield blamed the 26% fall in profits on higher pension charges, difficult market conditions, restructuring costs at John Lewis and booking extra holiday pay for staff.
“Excluding these, at a trading level our profits were broadly level with last year, despite the turmoil in the grocery market,” he added.
“Going forward, I expect sales in both Waitrose and John Lewis to perform comparatively well against the market, helped by promising new ranges and online capability,” he said.
In comparison, rival brand Next today (10 September) posted pre-tax profits of £347m, up 7% from the same period in 2014, for its own half-year results.
Next warned that prices would have to rise an extra 6% between 2016 and 2020 as a result of the government’s Living Wage, which will see the minimum wage set at £7.20 an hour for over-25s from April 2016 and rise to £9.35 by 2020.
However Mayfield highlighted that as the John Lewis Partnership already pays rates above the National Living Wage, the impact of the government changes on Waitrose and John Lewis would be “minimal”.