John Lewis gets ready to reacquire supermarkets as part of its retail expansion

John Lewis Considers Reacquiring Waitrose Stores

In 2023, John Lewis raised £150 million by selling twelve Waitrose locations. Now, the company is looking to reverse course by potentially buying back some of these supermarkets as it renews its focus on retail.

With a cash reserve of £1.5 billion and growing confidence in its recovery, John Lewis is evaluating the possibility of purchasing properties from landlords. This move signals a notable shift from last year, when the company relied on selling assets to generate funds.

Unlike some competitors owned by private equity, such as Asda and Morrisons—who have generated significant capital by selling parts of their property portfolios—John Lewis is considering regaining ownership of its stores. While sale-and-leaseback deals can provide quick cash, they often leave retailers with ongoing rental obligations.

The exact number of Waitrose stores John Lewis aims to repurchase remains uncertain, but insiders describe the approach as “opportunistic.”

Waitrose’s National Presence and Investment

Waitrose operates over 300 supermarkets throughout the UK, many of which are currently being modernized as part of a £1 billion investment initiative. Including service stations, airport outlets, and locations within John Lewis department stores, the total number of Waitrose sites exceeds 400 nationwide.

Recently, John Lewis acquired the freehold of the Hersham Green Shopping Centre in Surrey, further demonstrating its commitment to property investment.

Strategic Shifts and Leadership Focus

This potential buyback comes shortly after John Lewis decided to halt its plan to develop 10,000 homes, choosing instead to concentrate on its core retail business. This change in direction, led by chairman Jason Tarry, marks a departure from the diversification strategy of former leader Dame Sharon White.

Reacquiring supermarkets is part of a broader effort to channel resources into areas that are driving the company’s recovery.

Investment in Employees

In a recent internal communication, John Lewis revealed it has allocated up to £12 million to support higher pay for head office staff with essential skills or those considered key to the company’s transformation. All salaried employees are set to receive at least a 2% pay rise, with managers given discretion to award additional increases where needed. The company emphasized that investment will be directed to areas with the greatest need, utilizing the dedicated fund.

This initiative follows a period in which pay increases for head office staff lagged behind those for shop floor employees, who received a 6.9% raise this year.

Leadership Changes and Store Upgrades

To strengthen its leadership, John Lewis recently appointed Tom Denyard, formerly of Tesco, as the new head of Waitrose. Mr. Denyard is responsible for revitalizing the Waitrose brand, overseeing the £1 billion investment in store improvements, and leading plans to refurbish 150 existing supermarkets and open numerous new locations in the coming years.

John Lewis has declined to comment further on these developments.