John Lewis is rightly proud of its heritage... but it’s a short step from pride to hubris

The retailer should build on its strengths, not get down with the rest

The department store's profits plunged in the first half (Reuters)

So, it finally came to pass. John Lewis Partnership has shown itself to be fallible.

The once seemingly impregnable department store and Waitrose food retailing group has produced a set of figures that would not have looked out of sorts if they’d belonged to… well, House of Fraser or Debenhams. The mutually-owned high street bellwether (a title that used to belong to Marks & Spencer, but not since its long-term decline) has proven to be just as vulnerable to the harsh winds blowing through the UK retail sector.

Blimey, if the mighty John Lewis is suffering then things must be really bad. Suddenly, too, its widely admired business model of mutual ownership does not look so smart as the firm’s employees, sorry partners, are left wondering about their annual bonuses.

Two factors were largely to blame, said the chairman, Sir Charlie Mayfield, for the 99 per cent drop in interim pre-tax profits to just £1.2m: uncertainty and a weak pound caused by Brexit; and the cost of honouring its long-standing promise of “never knowingly undersold” in a market ever more dependent on heavy discounting.

Really, Charlie? Are individual consumers really not buying a steam iron or a new comfier sofa because of the decision over Britain’s future membership of the EU?

The fact is, that employment continues to flourish, the economy remains strong. That may change, come Brexit, nobody knows – but it hasn’t happened yet.

As for the weak pound, that’s only impacting at the margins, and comes nowhere near to accounting for a near 100 per cent collapse in profitability. A lagging currency also cuts both ways. Some stores in London and other centres on the overseas tourist itinerary are enjoying booming footfalls, precisely because of the cheaper pound. If Mayfield ever walks around London’s West End he may observe that the likes of Harrods, Fortnum & Mason and Selfridges are teeming, while the flagship John Lewis in Oxford Street is quiet. And he may want to ask himself why?

The truth, I suspect, is that compared with those stores John Lewis simply is not exciting. Against them it looks positively dowdy and dull. Their window displays and floor layouts are visually enticing. They make shopping seem fun and arresting. John Lewis, by contrast – and House of Fraser, Debenhams and yes M&S are also similar – make it appear like a chore, a duty, rather than something pleasurable and uplifting.

According to Mayfield, the second factor, living up to its price pledge, removed £40m from the profits for the first half of the year. It’s definitely the case that the historic mantra has become a yoke around the neck in tough times. Beleaguered House of Fraser and Debenhams, in particular, have both engaged in large-scale sales promotions, in increasingly desperate attempts to fight off the competition from online.

John Lewis, which promises to match prices from “bricks and mortar” retailers but not online-only, has been obliged to follow suit. Undoubtedly that has come at a cost. It’s hard to see how that pain will not intensify as more high street retailers slash prices to try and stay alive. Mayfield, however, maintains he is not for changing the guarantee. “No other business has a price promise as comprehensive as ours – no one else has anything quite like it. In times like this, the integrity of that promise is tested, but we can’t be never knowingly undersold in the good times, we have to be able to offer it in the tough times.”

He is mistaken. Worse, Mayfield is playing a dangerous game. If he is not careful, John Lewis will become like the rest, chasing the lowest common denominator of price. Not only is it a hideously costly ploy but in the end, it won’t work – just look at House of Fraser and Debenhams, still unable, after all their special bargains and reductions to compete with the likes of Amazon. That is not a route down which John Lewis should travel.

Of course, John Lewis is proud of its heritage. But it’s a short step from pride to hubris. What John Lewis management should be asking is how many of their shoppers genuinely go to John Lewis because it’s cheap? Do they opt for John Lewis because of that price pledge?

If I am typical I’ve chosen to use John Lewis because I know it will provide a higher level of service, deep knowledge of what it is they’re selling, a willingness to ensure I get the right item, even if that means not selling me one at all – not because I am enticed by price.

John Lewis should build on its strengths, not get down with the rest. And those qualities are having 83,000 partners who have a deep commitment to the business because they’re its owners, who go out of their way to serve, and to please. Mayfield and co are worrying about matching others for price – when the reality is those rivals cannot themselves match John Lewis for service.

The group is on a slippery slope. Pursuing value will lead to cutting corners, to shedding staff, lowering stock, scaling back on product ranges, lengthening delivery times. It may already be doing so. For a while now, my wife, who is a canny judge of these things, has been complaining “John Lewis is not what it was” and “the service is not the same”.

Having had a relatively easy ride in recent years, John Lewis finds itself at a crossroads. But choosing the direction just marked “price” is not the way ahead.

Chris Blackhurst is a former editor of The Independent, and director of CTF Partners, the campaigns and strategic communications advisory firm