John Lewis Chief Skeptical Over Sainsbury, Home Retail Tie-Upby
Street says union wouldn't have John Lewis/Waitrose attributes
Expects pressure on retailers to lead to further consolidation
The head of John Lewis department stores is skeptical over the merits of combining J Sainsbury Plc with Home Retail Group Plc, saying a union between the U.K. 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.
Over the six-week Christmas period, in which John Lewis’s sales rose by 6.9 percent to 951 million pounds ($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 tieups among U.K. 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?’”