John Lewis ditches its ‘Never Knowingly Undersold’ promise after the shop said it ‘doesn’t fit with how customers shop today’
- John Lewis has ditched its ‘Never Knowingly Undersold’ promise to customers
- Business said the promise is from a different era and will be retired this summer
- It said rise of online retailers like Amazon had pulled rug from under the pledge
John Lewis has ditched its ‘Never Knowingly Undersold’ promise to consumers before its centenary after the shop said that it ‘doesn’t fit with how customers shop today’.
The British high street retailer said that the nearly 100-year-old promise – which one expert dismissed as a ‘psychological sop’ – is from a different era and will be retired this summer.
The promise was that John Lewis would match the price of branded products in other shops if a customer pointed out they could find it cheaper elsewhere.
However, it said that the rise of online retailers such as Amazon had pulled the rug from underneath the pledge.
The policy did not apply to online-only rivals and MoneySavingExpert founder Martin Lewis said it was hardly used anyway.
Undated handout photo issued by John Lewis of their famous slogan ‘Never Knowingly Undersold’ being used for the first time in a paper, 1928
John Lewis said it would invest £500million to keep prices down
John Lewis has become one of the most recognisable brands on Britain’s high streets with the company also owning supermarket giant Waitrose.
But its history can be traced back to 1964, when founder John Lewis opened a small shop on London’s Oxford Street.
Over time it expanded, and the Lewis family purchased Peter Jones, a business in Sloane Square, before control of the company was handed to the founder’s son, John Spedan Lewis.
Spedan Lewis wanted to ‘create a way of doing business that was both commercial, allowing it to move quickly and stay ahead in a highly-competitive industry, and democratic, giving every Partner a voice in the business they co-own’, according to the brand’s website.
As a result, all members of staff are referred to as ‘partners’ and the company is run by a trust on their behalf.
John Lewis opened as a small shop in Oxford Street in 1864
The Oxford Street store with a festive display in 1936
Among its eye-catching schemes is a six-month leave for employees who have worked at the company for 25 years, an idea that was started in 1979.
In 1920 the firm offered its first ever bonus to all of its staff, and nine years later set up a medical service providing free healthcare for all partners – 19 years before the NHS was founded.
By 1940 the company had expanded further, purchasing Waitrose and 15 branches of the collapsing Selfridge Provincial Stores Group, by 1960 it was able to reopen a much larger shop on Oxford Street.
In 1963, Spedan Lewis died. Seven years later the company issued its annual bonuses to staff in cash, rather than in stocks and cash.
Stanley Carter, the ex-managing director of the department store on London’s Oxford Street, pictured in August 1965
At the turn of the century, John Lewis was preparing to move online, launching its website in 2001, while using Waitrose to supply online supermarket Ocado.
In recent years it has become known for its iconic Christmas adverts, the first one being launched in 2007.
Changing demands from shoppers and the decline of the high has had a negative impact on John Lewis’ stores. Last year it announced eight shops were to close, including a flagship site in Birmingham.
Today, a further 1,500 jobs have been put at risk, as it plans to close another eight stores in Kent, York, Hampshire, Northamptonshire, Cheshire and Aberdeen.
It plans to rely on smaller Waitrose stores that stock some John Lewis items, while also profiting online by expanding its click and collect service.
‘The Never Knowingly Undersold promise has always been a bit of a psychological sop to consumers, giving an arguably false impression that John Lewis is cheap,’ he said.
‘In reality, it allows the store to charge what it likes and know that, for a few price-sensitive shoppers – less than 1 per cent last year – who are bothered to check prices elsewhere after making a purchase, John Lewis will reduce its price but only to that of its high street competitors.’
John Lewis said that it would still monitor prices at its rivals, but that now it will invest £500million in keeping prices down without customers having to shop around.
The investment is 25 per cent more than was spent on keeping prices down last year, John Lewis said.
John Lewis executive director, Pippa Wicks, said: ‘Customers are tightening their belts and we’re responding so John Lewis is more affordable for every customer, every day whether shopping in-store or online.
‘Never Knowingly Undersold has been a cherished sign of trust for John Lewis for a century but it doesn’t fit with how customers shop today as more purchases are made online.
‘Our new £500million investment means all our customers can trust they’re getting the quality, style and service they expect from John Lewis at great value prices.’
The promise was introduced in 1925 when John Lewis only had two branches.
Independent retail analyst Nick Bubb said a decision to ditch the price match promise was ‘long overdue’.
‘John Lewis has to get control back of its gross margin after throwing so much away on unnecessary price-matching of Debenhams and House of Fraser sale promotions,’ he told the Guardian.
It follows reports that its sister business Waitrose has announced it is ending its free newspaper offer to loyalty card holders after revealing just five per cent of members are making use of it.
The move has prompted a backlash on social media, similar to the outrage Waitrose faced when it ended free coffee in 2017.
The upmarket supermarket chain, owned by the John Lewis Partnership (JLP), sent an email to myWaitrose card holders, informing them they will no longer receive a free newspaper when they spend £10 or more from February 22.
The email stated: ‘Nobody shops quite like you – so we’re updating myWaitrose to make it even more personal.
‘As part of these changes, the myWaitrose newspaper offer will be ending on 22 February 2022. But we’re replacing it with something new – look our for updates in the coming weeks.’
Waitrose is promising personalised offers, special members-only prices, and discounts on cooking classes.
In 2017 the supermarket faced a backlash when it introduced new rules forcing myWaitrose customers to buy items first before claiming their free tea or coffee. Stores later closed the machines ‘for the time being’.
Waitrose added: ‘Look out for updates in the coming weeks – and in the meantime, keep using your myWaitrose card, because the more you use it, the more personalised we’ll be able to make your offers.’
It comes as John Lewis and Waitrose are planning to cut around 1,000 jobs in stores.
The JLP is in the midst of a major shift in strategy to adapt to changing shopping habits, with the latest move part of a desire to simplify store management.
JLP said it will support employees who wish to stay in the business in finding new roles. The firm also aims to minimise compulsory redundancies through voluntary redundancy and severance options.
In March last year, John Lewis announced it was shutting eight stores across the country – putting 1,465 jobs at risk.
The eight shops shut comprised of four department stores in Aberdeen, Peterborough, Sheffield and York, and four At Home stores in Ashford, Basingstoke, Chester and Tunbridge Wells.
In January 2021, the group recorded a £517million pre-tax loss for the year to January – the first ever loss in its 157-year history.
Last July it announced the closure of eight stores, including its flagship site in Grand Central, Birmingham. This was followed by a further 1,500 jobs axed from head office in November.
For the first time in nearly 70 years, partners were not offered bonuses as the Covid-19 lockdown put added pressure on the high street retailer.
It decided not to reopen eight stores after the first lockdown, at a loss of around 1,300 jobs.
Prior to the pandemic Sir Charlie Mayfield, the former chairman, found that 20 of its department stores were no longer viable. The company predicts 70 per cent of its sales will be made online by 2025, the Mirror reports.
John Lewis said that it would still monitor prices at its rivals, but that now it will invest £500million in keeping prices down without customers having to shop around
The John Lewis Partnership is trying to save £300million per year in the wake of the virus to secure its long-term future.
The job cuts announced in November represented almost a third of its 5,000 head office staff and will help the firm save £50million a year.
It has already closed one of its two central London offices, and plans to convert excess space on the upper floors of its flagship Oxford Street store into offices.
In 2019 it made 75 of its 225 senior managers redundant. It hopes the plans will help to stall years of falling profits, and allow it to make £400million a year by 2025.
Department stores have been hit hardest as shoppers turn to online competitors, especially to buy clothes and electrical items.
Retailers are also battling a storm of rising staff costs, rents and business rates.
Coronavirus lockdown rules hammered the UK High Street with stalwarts such as Debenhams, WH Smith and Clarks all failing to escape the bloodbath.
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