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‘They have to think differently’ – shoppers on John Lewis’s new strategy | Business

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Christmas is still nearly 10 weeks away but Ina Ukstina is standing in John Lewis’s Kingston upon Thames store clutching several strings of shiny tree decorations.

“For the first time in my life I’m getting an artificial tree,” she says. “I’ve always had a real tree but have started to think about what happens afterwards, and I will be able to reuse it.”

Even aside from Christmas, new, more sustainable, shopping ideas are becoming mainstream and John Lewis has just announced an environmental push that will soon enable customers to rent their furniture rather than buy, and to recycle products such as mattresses and clothing at the end of their life.

Sharon White’s strategy to resurrect the fortunes of John Lewis includes a raft of measures – from cutting costs to expansion outside retail. The store group’s plans include:

  • Become a residential landlord. The retailer plans to build social housing to rent and has identified 20 sites, above or beside Waitrose stores. It is aiming to apply for planning permission for two sites in London early next year.
  • Furnish the apartments with John Lewis products and deliver Waitrose food to tenants.
  • Expand into “outdoor living” and possibly garden centres. The plan will combine Waitrose flowers and John Lewis garden furniture with landscape design services – and the group may buy a gardening business, too.
  • Replace the “never knowingly undersold” price pledge. A review is under way.
  • Introduce more lower-priced ranges. Also, cut the number of own-label fashion brands.
  • Offer more financial services, such as savings accounts and insurance. New home insurance policies will be available early next year.
  • Develop a loyalty scheme to use across both John Lewis and Waitrose.
  • Rent, resell and recycle more products.
  • Cut costs by £300m by 2022 – which could mean more job cuts – by making operations and head offices simpler and more efficient.
  • Increase profits to £400m by 2025.
  • Aim to reinstate staff bonus and pay all staff the real living wage within two years.
  • Sell more John Lewis products – such as homewares and Christmas trees – in Waitrose and more Waitrose food items in John Lewis, such as hampers.
  • Move about two-thirds of the John Lewis department store business online by 2025. Generate 40% of the group’s profits from sources other than shops by 2030.
  • Invest £1bn to expand online services, including a 30% increase in Waitrose delivery slots to 250,000 a week and more online personal styling, beauty and home advice at John Lewis.
  • More delivery and collection partnerships such as Waitrose’s delivery service with takeaway courier firm Deliveroo.
  • More click-and-collect points – and possibly changing rooms in Waitrose shops so John Lewis online fashion purchases can be tried on without taking them home first.
  • Recruit new staff from the care system to “better reflect the whole of the UK”.
  • Bring forward by 15 years, to 2035, a target to be carbon neutral. Source only from net-zero carbon farms in the UK and halve food waste in its supply chain.

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“I probably wouldn’t rent something,” says Ukstina. “I would prefer to have my own things so I’d buy it secondhand.”

Ukstina admits she doesn’t usually shop in the department store chain because it is too expensive, but she is spending a gift token. She is also wary about whether renting makes financial sense: “Renting could end up costing you more in the long run.”

In the furniture department Jacquie Gosney is sizing up a traditional high-backed Parker Knoll chair that costs about £1,000. Gosney, who is in her late 70s, doesn’t think renting is for her either.

“I’m old, and might not survive the pandemic,” she quips. Gosney is out shopping after reinstating the walls in her open-plan home to make it cosier, so she needs to buy smaller furniture. “Covid has shut so many shops. I used to go to Laura Ashley but it closed.”

The interior of John Lewis in Kingston



The interior of John Lewis in Kingston upon Thames. Photograph: Peter Nicholls/Reuters

Gosney has been a loyal John Lewis shopper for many years but complains the current furniture is too young for her tastes. “I’m surprised by the selection for oldies – it is all ultra modern. I’m into Parker Knoll chairs, not furniture on spindly legs.”

The pandemic has made it difficult to pass on her unwanted furniture, she says, even to charity, so she is considering using her street’s WhatsApp group, where neighbours trade or give away belongings.

John Lewis has traditionally been famed for its customer service and for selling high-quality products, but its crown has slipped a little in recent years.

Mary Lane, out shopping with her daughter Gabrielle Gale, has just spent £2,000 on a cooker and admits she did not even visit other stores before sealing the deal, as she was reassured by the John Lewis badge of quality and the “never knowingly undersold” price promise.

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Gale says she would be interested in the employee-owned group’s new ideas which also include selling more financial products and garden centres. “I love John Lewis and anything that help keeps them afloat is a good idea,” she adds. “The high street is dying so they have to think differently.”

One of the boldest new ideas being pursued by the group’s chairman, Sharon White, is to become a residential landlord, building rental flats to “furnish using John Lewis home products and deliver Waitrose food”.

To some, the combination sounds like living the middle-class dream.

“That sounds amazing, I love John Lewis,” says Jessica Lumley, another shopper browsing the toys. “I like that the business is a partnership and am very aware of that. I don’t know how that works out if you are a staff member, but I love the idea.”


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Procter & Gamble (PG) earnings Q1 2021 beat estimates

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Procter & Gamble’s products include Crest toothpaste.

Tiffany Hagler-Geard | Bloomberg | Getty Images

Procter & Gamble reported on Tuesday that fiscal first-quarter revenue rose 9%, fueled by demand for its cleaning and laundry products during the coronavirus pandemic.

On the heels of the strong quarter, P&G raised its sales outlook and expectations for core earnings growth for fiscal 2021.

Shares of the company rose nearly 2% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.63 vs. $1.42 expected
  • Revenue: $19.32 billion vs. $18.38 billion expected

The company reported net income of $4.28 billion, or $1.63 per share, up from $3.59 billion, or $1.36 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings of $1.42 per share.

Net sales rose 9% to $19.32 billion, topping expectations of $18.38 billion. Organic revenue, which strips out the impact of acquisitions, divestitures and foreign currency, also climbed 9% in the quarter. Higher demand in North America, P&G’s largest market, helped drive sales growth.

All of P&G’s five business segments reported organic sales growth. CFO and COO Jon Moeller said on CNBC’s “Squawk Box” that the U.S. saw growth of 16% and China reported growth of 12%. He told reporters on a press call that the company has not seen U.S. consumers opting for cheaper brands, despite the impasse in another stimulus package from the federal government.

Fabric and home care, which includes Tide and Comet cleaning products, saw the highest jump, with organic sales rising 14% in the quarter.

The home care segment saw organic sales soar 30%, fueled by demand for home cleaning products, like Mr. Clean.

Health care, which includes Crest toothpaste, Vicks, Pepto-Bismol and Oral-B, also reported double-digit organic sales growth. More consumers bought its digestive and wellness products.

Its beauty segment saw organic sales growth of 7%. The launch of Safeguard hand soap and hand sanitizer and new products from Olay lifted North American sales for skin and personal care.

Organic sales for its grooming business rose 6% in the quarter, but its shaving business, which includes Gillette and Venus brands, reported flat organic sales. P&G said women’s razors and blades rose by single digits, but men aren’t shaving as much during the pandemic.

The company’s baby, health and family care segment reported organic sales growth of 4%. The category includes Pampers diapers, Bounty paper towels and Charmin toilet paper. 

As consumers spend more time watching television and checking social media, P&G is putting more money into advertising. Higher demand for cleaning products also pushed the company to spend more on advertising to put its brands front and center.

“This is not the time to step back,” Moeller said.

P&G now expects sales growth of 3% to 4% during fiscal 2021, up from its prior forecast of 1% to 3%. Organic revenue is now forecast to rise by 4% to 5%, higher than its previous expectations of 2% to 4%.

While the early retirement of debt will reduce its net income by 5 to 20 cents a share this fiscal year, core earnings per share will be higher than previously expected. The company is forecasting growth of 5% to 8%, up from its prior forecast of 3% to 7%. After-tax foreign exchange impacts and freight costs are expected to hit earnings by a combined $375 million.

P&G expects to buy back more stock as well during the fiscal year. The company previously said it would spend $6 billion to $8 billion on buying back shares but now plans on spending $7 billion to $9 billion.


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Covid-19 likely to become as ‘endemic’ as flu

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Health workers are dressing with protective suits and face maks. The collection of swab samples by medical staff in the drive-in testing center of San Filippo Neri hospital in Roma, Italy on October 19, 2020.

NurPhoto | NurPhoto | Getty Images

LONDON — Covid-19 is likely to become as “endemic” as the annual flu virus, according to the U.K.’s chief scientific advisor.

“We can’t be certain, but I think it’s unlikely we will end up with a truly sterilizing vaccine, (that is) something that completely stops infection, and it’s likely this disease will circulate and be endemic, that’s my best assessment,” Patrick Vallance told the National Security Strategy Committee in London on Monday.

“Clearly as management becomes better, as you get vaccination which would decrease the chance of infection and the severity of disease … this then starts to look more like annual flu than anything else and that may be the direction we end up going,” he said.

He cautioned that a vaccine against the new coronavirus — and there are a handful in Phase 3 clinical trials, according to the World Health Organization — is not likely to eradicate the virus anyway.

“The notion of eliminating Covid from anywhere is not right, because it will come back,” he said, noting there had only been one human disease “truly eradicated” thanks to a highly effective vaccine and that was smallpox.

Biotech companies and academic bodies around the world have joined forces to try to create a vaccine against the coronavirus at breakneck speed given its ferocity. On Monday, the grim milestone of 40 million confirmed coronavirus cases worldwide was reached, and the virus has caused 1.1 million deaths, according to data from Johns Hopkins University.

Historically, creating a vaccine from scratch had taken 10 years on average, Vallance said, and it had never taken under five years.

“We’re now in the extraordinary situation where there are at least eight vaccines which are in quite large clinical studies around the world … We will know over the next few months whether we have any vaccines that really do protect and how long they protect for,” he said.

He added there were a number of vaccines that created an immune response and antibody response, but only the Phase 3 clinical trials would prove whether they “actually stop people getting infected.” The safety profile of such vaccines would also become clearer and from then on, a “sensible vaccination strategy” could be looked at, Vallance said.

Vallance concluded he didn’t believe there would be any vaccine available for widespread use in the community until at least spring 2021.


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WHO holds briefing on coronavirus after cases hit 40 million

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[The stream is slated to start at 11 a.m. ET. Please refresh the page if you do not see a player above at that time.]

The World Health Organization is holding a briefing Monday on the coronavirus pandemic after the number of reported cases worldwide hit 40 million.

The grim milestone comes as various parts of Europe and the U.S. struggle to deal with an alarming surge in infections. On Friday, the WHO said that Europe’s coronavirus outbreak is “concerning” as the number of available intensive care beds continues to dwindle and near capacity in some regions.

“We know of a number of cities across Europe where ICU capacity will be reached in the coming weeks,” said Maria Van Kerkhove, the WHO’s technical lead. “That is concerning as we approach the flu season.”

Read CNBC’s live updates to see the latest news on the Covid -19 outbreak.

–CNBC’s Holly Ellyatt contributed to this report.


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