The CEO of John Lewis and Waitrose is looking to launch a service that allows customers to buy now and pay later , as middle-class consumers are being squeezed more by the rising cost of living.
Nish Kankiwala is the new chief executive officer of John Lewis Partnership. He took over the role in march. Nish Kankiwala said that younger customers “expect buy now, Pay later” (BNPL), and that the department store will likely develop its own version.
BNPL offers people the opportunity to borrow money without interest to purchase goods. The debt is then settled by a series payments made over several months.
In recent years, the lending product that was pioneered by companies like Klarna has gained popularity, especially among young women.
John Lewis offers interest-free financing for furniture and nursery products worth more than £500. Customers can pay over a period of 12 months.
The comments of Mr Kankiwala suggest that the department store could offer instalment payment for items with lower value. Typically, Buy Now, Pay Later loans are used to purchase clothing and shoes, not expensive items.
John Lewis’s middle-class customers are being squeezed by the rising cost of living and Jeremy Hunt’s stealth tax raids.
The National Institute of Economic and Social Research said that the pandemic and cost of living crises have caused the middle classes to be around £2,500 worse off per year.
John Lewis also looks for ways to improve performance, after losing over £200m in the last year.
Mr Kankiwala said to the Mail on Sunday, “I believe we will develop a product that allows you to buy now and pay later.” People expect it, especially the younger generations.
A John Lewis spokesman confirmed that the partnership does not have immediate plans to launch a BNPL, but it did confirm it is offering interest-bearing loan for large purchases like TVs and computer.
In order to make online purchases more affordable, the company is now offering on-the spot loans with an APR of 16.9% for purchases made in-store. The loan will be extended to include furniture and homeware.
The new loans, according to a spokesperson, “will help customers by spreading out the costs over a longer term”.
Despite the looming threat of regulation by a Labour-led government, there are still ambitions for a BNPL.
Tulip Siddiq is the shadow city minister for the party. She sent a letter to Treasury Ministers a few weeks ago calling for greater regulation of BNPL.
She said that “vulnerable consumers” were at risk because of unethical businesses that operate in this sector.
Christopher Woolard warned that BNPL loans put “millions” of consumers in financial trouble.
John Lewis’ spokesperson said: “We have very transparent pricing. Our APR (annual interest) is 16.9pc, and repayments are always displayed along with the total amount due.”
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