“I think this is definitely a September question,” smiles Dame Sharon White as she seeks to avoid reflection on her turbulent time at the John Lewis Partnership.
At the end of summer she will hand over to Jason Tarry, a veteran of more than three decades at Tesco, and complete the shortest tenure of any chairman in the history of John Lewis.
There are some months and plenty of work to go before the end of what at times must have been an ordeal, as the retailer grappled with crippling debts, the pandemic and the cost of living crisis.
Perhaps it is unfair to demand self-examination. But Dame Sharon, who is 57 and one half of a Whitehall power couple (her husband is Robert Chote, chairman of the UK Statistics Authority), eventually obliges. Just about.
“I’m a very pragmatic person,” she warns anyone hoping for a sob story.
“Look at the high street names that aren’t here, but were here in 2019. The fact that we’ve come through it, the business has got momentum and the team is in place for a smooth transition. I’ve felt incredibly lucky.”
That will have to do for now. The business world has been gripped by Dame Sharon’s progress at John Lewis ever since she was appointed seemingly out of the blue in 2019.
After decades in Whitehall spent climbing the ranks of the Treasury, followed by a successful stint as chief executive of the media regulator Ofcom, she made the unusual leap from officialdom to the front lines of business.
In one bound she became arguably Britain’s most high-profile black woman, an extraordinary story of success for the daughter of a Windrush immigrant who, from a state school in 1980s east London, got into Cambridge to study economics.
Without any commercial – let alone retail – experience, Dame Sharon may have been a touch fortunate to get the job. But the cards she was dealt thereafter were not winners.
Previous management had racked up billions of pounds of debt opening new department stores even as online shopping was eroding the high street. Then the devastating one-two punch of Covid and runaway inflation created unprecedented turmoil for retailers.
John Lewis and its supermarket Waitrose have survived, but at times under Dame Sharon it looked touch and go. She has shut stores, cut bonuses, axed thousands of jobs, chased new businesses and thought the unthinkable – such as diluting the mutual ownership model that is its foundation – in a battle with mounting losses.
While there is still plenty to do, with the end in sight Dame Sharon now seems ready to declare some victory. In March John Lewis returned to profit after spending two unfamiliar and deeply uncomfortable years in the red.
“We’ve come through once in a generation events over the last five years,” she says, sipping tea in the restaurant of Peter Jones, the John Lewis department store which invites the well-heeled shoppers of Sloane Square, Chelsea, to consider some middle-class homeware.
“We’ve had the pandemic and we’ve had inflation at a level we haven’t seen since the 1970s. We’ve come through that as a partnership with all the upsides of the partnership – transparency, service, long-term focus – intact.
“I would say it’s a watershed moment. Some of the difficult decisions we took over the last year mean that we’re now generating more cash as a business.”
At the start of next year, John Lewis will use some of the cash it is now generating to pay off a £300m bond debt, part of the legacy of arguably reckless expansion in the 2010s. That will leave it in its best debt position in 21 years.
“We’re back on track and much more fit for the future. This is a launch pad for the next phase of growth for the business and to be frank we’re in as solid a position as we could be given the five years we’ve had.”
John Lewis is an unusual animal. Dame Sharon likes to remind people that its mutual structure, in which staff are partners in the business, was created as an “alternative to communism”.
“The partnership almost sits apart from the rest of the business world,” she adds. “We’re almost more in the mode of the BBC or NHS as a national institution, because people feel that they’ve got a stake.”
The John Lewis constitution prohibits the maximisation of profits, which is a requirement for ordinary capitalistic enterprises. There has been some irony to this, as the partnership is more dependent on its profits than a business which can turn to shareholders for financial support in a crisis.
“The partnership model was never in question,” insists Dame Sharon, who considered bringing in outside cash in ways that could have preserved John Lewis’s mutual status but nevertheless would have been highly controversial with staff.
“The question is about how you fund your growth. The most straightforward is you generate your own cash through trading.”
So being back in the black is a big deal. For Waitrose especially, which has suffered in the brutally competitive grocery market with tired stores in which it has been unable to properly invest, it should be transformative over the next few years, says Dame Sharon.
“I’m looking forward to what Waitrose is going to be doing over the next two to three years,” she says.
“The big thing is we’ve now got the cash to invest in the future of the business. Across the two brands [John Lewis and Waitrose] last year we generated something like £210m more, which means we’ve got the cash to invest into growth this year.”
Some 80 Waitrose stores are scheduled to get upgrades in the next three years. The outlet in Sudbury, Suffolk (“a very picturesque part of East Anglia”, says Dame Sharon) was first to get the treatment with a new layout and technology.
The main Waitrose in Hampstead is next.
“We’ve started to think about how we get the right balance between service and productivity,” says Dame Sharon. “You won’t see Waitrose stores completely stripped of partners and relying on self-checkout.”
It’s somewhat overdue. One wealthy American technology executive who recently moved back to the UK after seven years away was struck by the shabbiness. “What the hell happened to Waitrose?” she asked at an industry dinner.
Meanwhile, Marks & Spencer has been enjoying a resurgence, expanding its grocery business as it chases the crown of grocer to Middle England. Chief executive Stuart Machin recently told The Telegraph he hoped to have overhauled Waitrose’s market share by now.
“I don’t recognise his numbers,” smiles Dame Sharon, before adding the business leader bromide that “all competition is healthy”.
In fairness, there are signs that Waitrose is responding to the pressure, both from competition and the cost of living crisis that might have made shoppers retreat to cheaper options. “Even our customers haven’t been completely immune from what’s happened with inflation,” says Dame Sharon.
Waitrose defended its position by cutting the price of everyday purchases such as chicken breasts and fresh fruit and vegetables.
“We’ve wanted to be able to say you can shop in Waitrose, you can do more of your essentials in Waitrose and you can see the results,” says Dame Sharon. “Last year you started to see our sales volumes up but also go up ahead of the market.”
Waitrose’s upmarket credentials are not being neglected, however. A partnership with the Israeli-born chef Yotam Ottolenghi, who brought Middle Eastern cuisine to the mainstream, is expanding over the coming months.
“We’ve been trying to have a partnership with him for some time,” says Dame Sharon. “For me it’s this totemic thing for Waitrose customers. It’s the first time he’s done a partnership with any grocer.”
The latest numbers from Kantar, a marketing data company which tracks shopping baskets across supermarkets, suggest some progress. Over the past 12 weeks 188,000 new shoppers went to Waitrose, more than any other grocer. Market share slipped by 0.1 percentage points to 4.5pc.
“Across John Lewis and Waitrose we’ve got a million more customers shopping with us today than last year,” says Dame Sharon.
The financial constraints on John Lewis in recent years have meant that Waitrose has had to stand on the sidelines as M&S and the German discounters Aldi and Lidl have opened stores and taken market share. As part of the investment programme finally underway, however, Waitrose will open new stores for the first time in seven years.
The convenience market – in which it operates the Little Waitrose brand – will be top priority, says Dame Sharon. Until now she has had to rely on partnerships with Deliveroo and UberEats to address growing demand for small, quick shops.
“We are underrepresented in convenience,” says Dame Sharon.
“We’re basically driving convenience through online. I think having a bigger presence for Waitrose locally and with more local ranges is a massive opportunity for us.”
The John Lewis department stores seem a trickier proposition, despite the drastic surgery Dame Sharon has performed. Some 16 outlets out of 50 did not survive the pandemic, leaving major cities such as Sheffield and Aberdeen without a John Lewis.
Turnover was still down last year, by 4pc, to £4.8bn as its homeware and technology sales struggled with the weak housing market.
The task of restoring growth to the business has been handed to Peter Ruis, who worked at the chain in its heyday of 2005 to 2013. He returned earlier this year and is seeking to boost John Lewis with better relationships with big fashion brands, and more attractive restaurants to draw in tired shoppers.
Dame Sharon insists the superior service that has always marked out John Lewis on the high street remains in place, although concedes that the turmoil of recent years has left some room for improvement.
“There’s probably a bit of work to be done in our home business. If you want to have an interior design service or you’ve got questions about your white goods there is nowhere else on the high street you can come to for advice.”
She has high hopes that improving consumer confidence will brew with a faster-moving housing market to trigger more of the big-ticket purchasing that can make a big difference to John Lewis in the coming months.
“Customer sentiment is definitely on the rise,” she says. “But at the same time we can still see people being price conscious. It’s still quite a promotional market. But there is definitely more confidence about this year than last year.”
In the midst of the election campaign and with a long career as a civil servant behind her, Dame Sharon is too fleet-footed to be drawn into party politics, even though she has become something of a regular on the BBC’s Sunday with Laura Kuenssberg.
Even John Lewis, she argues, cannot be politically pigeon-holed by simpleton journalists (not her words).
“I don’t think it’s a Left-wing or a Right-wing philosophy,” she says. “I do think it is communitarian and altruistic, which is something I personally feel very drawn to.”
But surely, with the Conservatives heading for a historic pasting at the ballot box and a radical change in the political weather imminent, a big business such as John Lewis must have a perspective?
“I think that people in the country want to be happier and have a sense of stability,” she says.
She has one warning for Starmer, as a former Treasury mandarin. He should not listen to the likes of Andy Haldane, the former chief economist at the Bank of England, who has argued for the Treasury to be broken up and a department for growth created.
“No, I’m not in favour of that,” Dame Sharon says with unusual directness. “I don’t buy it. We had this experiment in the 1960s. You cannot detach the public spending arm of the Treasury from its growth and productivity agenda. That agenda is much stronger if you are sitting with the team figuring out the fiscal space to make it happen.
“Spinning out a growth department that is separate from a chancellor taking decisions on public spending and debt is a recipe for poor economic decision-making.”
She is also ready to join the chorus demanding a new approach to regulation in Britain. Even John Lewis shares the perception that an obsession with consumer protection has strangled various sectors of the economy in red tape.
“I think that we haven’t got the balance right between investment and the consumer interest,” says Dame Sharon. “I’ve lost count of the number of overseas investors at international conferences who have said the regulatory environment in the UK has become a barrier to investing.
“The question post-Brexit is how our regulatory institutions are designed to reap a dividend from capital flows into the country. I think that’s a very fertile area for a new government to look at.”
For John Lewis, arguably the biggest opportunity of a Labour government would be decisive action to unblock the planning system. One of Dame Sharon’s big moves as chairman was to push the partnership into property development, hoping to build apartments to rent on top of stores and next to Waitrose car parks.
“Let’s hope, whoever wins, they have a strong enough mandate for urgent action on planning,” says Dame Sharon.
The plan was intended to shore up the balance sheet. John Lewis is still working its way through tortured planning processes at various potential sites, but a strategy update recently put the focus back on the core retail business against the backdrop of higher interest rates.
Dame Sharon says it shouldn’t give up on becoming a big landlord.
“I still think it’s the right thing to do. We’re going as fast as the market will allow us.
“Making sure that the cash we’ve generated is invested in brilliant retail brands is absolutely the right thing to do. But It will always be important for the partnership in the medium and long term to have a balanced portfolio of businesses.
“You don’t have shareholders to step in if something goes wrong. You always want to make sure you’re not overexposed to the customer in one activity.
When John Spedan Lewis bought Waitrose, which was unbelievably controversial at the time, he bought it with the idea of setting up a hotel business with Waitrose as the catering arm. “It didn’t work out that way, but it worked out.”
Managing the atmosphere within John Lewis through the troubles of her tenure has been one of Dame Sharon’s biggest challenges. Used to stability and juicy bonuses, partners have been confronted with job insecurity and the complex world of debt covenants.
Bonuses disappeared altogether. Internal forums have been in uproar at times and Dame Sharon has come in for some harsh criticism.
“It has not been easy for partners,” she admits. “At the same time I think there’s now a real understanding about where we are and also the opportunities for the next phase.”
Dame Sharon’s own next phase is not yet clear.
“Any chairman wants to leave the business in a solid and happy place for your successor. I’ll probably take some time off then think about it at the back end of the year. In an ideal world it would be a combination of commercial and public service things.
Despite the hard times, it seems she will miss John Lewis.
“There is something quite comforting about being in a workplace where people care how you’re doing.”
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