John Lewis Plans To Buy Back Waitrose Supermarkets

John Lewis is considering the purchase of several Waitrose supermarkets as part of a renewed strategy to strengthen its retail presence. The company’s leadership is exploring opportunities to acquire properties from landlords, following the accumulation of a £1.5 billion cash reserve. This shift marks a significant turnaround for John Lewis, particularly after the sale of a dozen Waitrose stores in 2023, which generated £150 million.

The decision to potentially buy back supermarkets represents a notable departure from the trend seen among private equity-owned rivals in the retail sector, such as Asda and Morrisons. These companies have often opted for sale-and-leaseback arrangements, allowing them to secure immediate financial resources while incurring long-term rental obligations. The exact number of Waitrose supermarkets John Lewis intends to acquire remains unclear; however, a senior source indicated that the approach is opportunistic.

Currently, there are over 300 Waitrose locations in the United Kingdom, and many are undergoing upgrades as part of a £1 billion investment programme. Including service stations and airport outlets, the total number of Waitrose sites exceeds 400. John Lewis recently announced the acquisition of the freehold for the Hersham Green Shopping Centre in Surrey, indicating an ongoing commitment to physical retail spaces.

The potential buyback of Waitrose supermarkets follows John Lewis’s withdrawal from a plan to develop 10,000 homes, a move described as a return to focusing on the high street. This decision is part of chairman Jason Tarry’s strategy to rectify the diversification efforts initiated by his predecessor, Dame Sharon White. The ongoing negotiations regarding supermarket buybacks are seen as part of a broader initiative to enhance spending within the retailer.

In a recent internal memo, John Lewis stated that it had allocated up to £12 million to facilitate pay increases for head office employees deemed critical to the company’s revitalisation efforts. All salaried staff will receive a minimum of a 2 percent salary increase, while managers will have the discretion to award larger raises based on need.

This shift in focus toward retail and the bolstering of team capabilities follows years of pay discrepancies between head office and shop floor workers. This year, shop floor employees received a 6.9 percent pay increase. John Lewis is also committed to enhancing its management team with strategic hires, including Tom Denyard, who was appointed as the new Waitrose leader from Tesco and is responsible for implementing the £1 billion investment plan aimed at refreshing the brand.

Overall, the moves taken by John Lewis signal a clear intent to regain momentum in the competitive retail landscape. By realigning its focus on supermarkets and enhancing employee compensation, the retailer aims to position itself for future growth.