The head of John Lewis department stores is skeptical over the merits of combining J Sainsbury Plc with Home Retail Group, saying a union between the UK retailers wouldn’t replicate the attributes of his company’s grocery and non-food stores.
John Lewis has a “huge overlap” with the customer base of Waitrose, the supermarket chain with which it shares employee ownership, Andy Street said in an interview Wednesday after the retailer reported a web-fueled gain in holiday sales.
“I cannot believe the same ingredients would be there in a tie-up between Sainsburys and Home Retail,” Street said, referring to Tuesday’s announcement that London-based Sainsbury may make an offer for the owner of Argos and Homebase stores after having an earlier approach rejected.
More Deals?
Over the six-week Christmas period, in which John Lewis’s sales rose by 6.9 per cent to £951 million ($1.4 billion), more shoppers visited stores for advice on products before buying online, underlining the complementary fit between physical stores and a strong e-commerce offer, Street said.
That means the possible takeover of Home Retail by Sainsbury may be the first of several tie-ups among UK retailers, he said. Many chains are saddled with hefty rent bills at a time when an increasing number of consumers are shopping online.
Street added: “After Christmas there will be one or two retailers thinking, ‘have we read the market quite right? How will we roll our dice again?’”
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Jenny Whelan. To subscribe to ESM: The European Supermarket Magazine, click here.
