The new Chief Executive of John Lewis has given a stark warning to the Bank of England, cautioning against higher interest rates that could “tip into recession”.
Nish Kankiwala was appointed as the Partnership’s first Chief Executive in March and has since been laying out his recovery plan for the struggling high street favourites John Lewis and Waitrose. And he is predicting “entry level brands” will continue to “grow significantly” given wider market conditions, as well as buy-now-pay later options.
“I think we will develop a buy-now-pay-later product. Especially in the younger generation, people expect it.
“The Bank of England wants to make people feel a bit gloomier, so they spend less, and it is working,” Kankiwala told the Mail on Sunday.
“If you look at previous booms and busts sometimes it goes too far, and we tip into recession. The trick is to avoid that. But that is for the bank. I just run shops.”
Kankiwala arrives having held a raft of executive positions across FMCG corporates, including Hovis, Burger King, and Unilever. Prior to his appointment, the sibling chains of John Lewis and Waitrose had separate bosses with an overseeing Partnership chairman. With a headcount of over 74,000, it remains the largest employee-owned business in the UK.
“We have never had a CEO,” Kankiwala added.
“In the old days we had two of everything. We have brought together all the functions and they all report to me now,” he told the MoS.
The Partnership faced losses of £234 million last year and partners have not received bonuses since 2019. Kankiwala’s task is to implement the ‘Partnership Plan’ – a revival strategy devised three years ago by group Chairman Sharon White.
The plan targets profits of £400 million by 2025, alongside the reinstallation of partner bonuses, and the new boss is adamant targets “will be achieved by taking out more costs.”
“We are midway through it,’ Kankiwala said. ‘We have had the cost of living, rising utility bills and an additional £180 million of costs.
“With all the extra expenditure coming out of the business we really have to make sure we are as productive as possible. In some areas we are not as efficient as other retailers. We need to look at waste and the supply chain.”
John Lewis has made over 2,000 post-pandemic redundancies, with 16 shops closed. Nine Waitrose shops have also shut, with 500 job losses. Kankiwala pledges there are no more closures planned.
“When the previous team did the work, their assumption on inflation was about 3 per cent. We have taken out £300 million of costs already. This year we will probably take out £100 million.
“In procurement, we can do better. But we want to do it sustainably, not just slash.”