John Lewis Revives Iconic Price Promise in Retail Strategy Shift

John Lewis, the renowned British retailer, is making a significant strategic shift by reintroducing its iconic "never knowingly undersold" promise. This move comes as the company, founded in 1864, seeks to regain its competitive edge and appeal to its core customer base.

The revival of this century-old pledge coincides with leadership changes at the John Lewis Partnership (JLP). Jason Tarry, a retail veteran with three decades of experience at Tesco, is set to take the helm as chairman later this month, replacing Dame Sharon White. This transition marks a renewed focus on retail fundamentals for the partnership, which also operates Waitrose supermarkets.

The "never knowingly undersold" promise, originally introduced in 1924, was a cornerstone of John Lewis's customer-centric approach. It assured shoppers of the best value by offering to refund the difference if they found an item cheaper elsewhere after purchase. However, this pledge was discontinued in 2022 under Dame Sharon White's leadership, citing its incompatibility with the digital shopping era.

In a bid to modernize this classic promise, John Lewis is now leveraging artificial intelligence to price match against 25 competitors, including M&S, Selfridges, and Next. The retailer has already adjusted approximately 30,000 prices as part of this initiative. This technological integration aligns with the company's history of innovation, having launched its online store in 2001 and being among the first UK retailers to offer a loyalty card program.

Peter Ruis, executive director at JLP, explained the rationale behind reviving the promise:

"This isn't about a debate about the past. At the end of the day my perception is that we had a price mechanism that had to change. It wasn't fit for purpose when it was dropped."

He further elaborated that the previous iteration of the promise had become confusing for customers, particularly regarding its applicability to online and in-store purchases.

The reintroduction of this price promise is part of a broader strategy to enhance customer experience. John Lewis is also increasing staff presence on shop floors to improve service quality. This focus on customer service aligns with the company's reputation, having won numerous awards in this area over the years.

These changes come after a challenging period for the retailer. John Lewis reported losses for three consecutive years, including a substantial £234 million deficit in early 2023. However, in a June 2024 interview, Dame Sharon White asserted that the business had regained momentum and returned to profitability.

As John Lewis embarks on this new chapter, it continues to balance its rich heritage with modern retail practices. The company, which holds Royal Warrants from both Queen Elizabeth II and King Charles III, is not only focusing on competitive pricing but also on sustainability, aiming to achieve net-zero carbon emissions by 2035.

This strategic pivot demonstrates John Lewis's commitment to adapting to changing market conditions while honoring its longstanding commitment to value and customer satisfaction. As the retailer prepares for the crucial festive sales period, it will be launching a multimillion-pound advertising campaign to promote its revived price promise, building on its tradition of creating highly anticipated Christmas advertisements that have become a British cultural phenomenon.