John Lewis’s first-ever owner CEO has the toughest job in retail

Retail runs in the blood of Nish Kankiwala, the former Hovis boss who became the first-ever CEO of the John Lewis Partnership, owner of the department store chain and Waitrose supermarkets.

His family came to the UK from Mumbai, India in the 1960s.

Initially, his parents could not afford Kankiwala and his sister to come to London, so the children stayed with their grandparents who owned six sari shops.

“I used to go to the shops on my way to school,” he says. “I like fabrics.”

It sounds ideal for a man who will be responsible for all John Lewis cushions, curtains and beautifully upholstered sofas. Not to mention the legendary haberdashery and tailoring departments.

Kankiwala originally ran a clothing stall in East London’s Walthamstow Market.

He also ran the family’s shop next to a post office in Tottenham, North London, when his father fell ill while he was studying for college at University College London. ‘I did engineering, but I couldn’t escape my retail destination,’ he laughs.

Kankiwala finds himself back on the shop floor in one of the industry’s toughest jobs: restoring John Lewis and Waitrose to their former status. The two chains were once synonymous with quality, service and were the undisputed destination of choice for British mid-range shoppers.

For example, Waitrose was the first British supermarket to sell hummus – in the 1980s – and sushi – in 1996 – and also the first to offer organic products.

It has its own farm and was the first to have its own vineyard. In a sign of the times, it also has the largest range with over 900 ‘Essentials’ products.

While middle-class credentials still run deep, there’s even an “Overheard in Waitrose” satire on social media, gently poking fun at the pretensions and foibles of the patrons. But the company struggled during the pandemic and the rampant inflation that followed.

At the root of these problems, which affected the retail industry as a whole, department stores seemed to lose their mojo as they faced intense competition online and elsewhere in the high street.

John Lewis, the UK’s largest employee-owned company with 74,000 partners, dropped its “never knowingly undersold” policy, a move that would once have been a sacrilege. Even the wealthy customers are having a harder time.

‘The Bank of England wants to make people a bit more gloomy so that they spend less, and that works,’ says Kankiwala sharply.

‘If you look at previous peaks and troughs, things sometimes go too far and we end up in a recession. The trick is to avoid that. But that’s for the bank. I only run shops.’

He says Anyday – the John Lewis ‘entry-level’ brand for home and fashion – has ‘grown significantly’, as has the Waitrose Essentials label.

He’s also considering offering Klarna-style installment payments, which are often associated with lower-income consumers. “I think we’re going to develop a buy-now-pay-later product,” he says. ‘People expect that, especially among the younger generation.’

Kankiwala, who was a non-executive for two years before becoming CEO, will work with chairman Dame Sharon White to try to restore the partnership’s place in the hearts of the nation.

They’ve done their job. Last year’s losses were £234 million and partners have only had one bonus in the last three years.

The hope is that installing Kankiwala as John Lewis and Waitrose’s first CEO will boost the revival. Previously, the two chains had separate bosses, each reporting to the chairman.

“We’ve never had a CEO,” says Kankiwala. “We used to have two of everything. We have brought all functions together and they all report to me now.’

Kankiwala’s job is to implement the recovery strategy – called the Partnership Plan – that White formulated three years ago. The five-year blueprint aims to reduce costs, improve services and expand into areas such as financial services and high-quality rental housing.

The aim is to make £200m in profits over the next two years and £400m in 2025. Along the way, White has pledged to bring back partner bonuses when profits reach £150m and debt is reduced.

But given the economic downturn since the plan was introduced, is this still realistic?

“We’re halfway there,” he says. ‘We’ve had the cost of living, rising utility bills and a further £180 million in costs.

“It means we have to push even harder in some areas of the plan where I can bring my skills into play. Number one: I’m fixated on customers. Growing up like me, I can think of a thousand examples of learning from customers because they tell you the truth, even though you may not like that.

Number two is cost. With all the extra expenses coming out of the business, we really need to make sure we’re as productive as possible. In some areas we are not as efficient as other retailers. We need to look at waste and the supply chain.

“The third area we need to boost is technology. We didn’t invest as quickly as we should.’

Despite three years of losses, he still thinks he will achieve the profit targets. “In general, I think they will be achieved by taking more costs,” he says.

“When the previous team did the work, they assumed inflation was around 3 percent. We’ve already taken £300 million in costs. This year we will probably take £100m.”

‘We can do better in purchasing. But we want to do it sustainably, not just slash.’

John Lewis has closed 16 stores since the pandemic, leading to more than 2,000 layoffs. And nine Waitrose stores have closed, leading to more than 500 job losses. Kankiwala says there are no plans to close any more stores.

When White spoke in March about the possibility that there could be more implications for jobs, she meant by attrition. No layoffs have been announced.

In terms of bonus recovery, he says staff are more concerned about higher base wages. Partners have been promised they will receive at least the real living wage of £10.90 an hour – or £11.95 in London – once profits exceed £200 million. Customers may be surprised that this hasn’t already happened.

There have been suggestions that John Lewis’s plight had become so desperate that White was willing to dismantle the partnership model in order to bring in new investment. However, Kankiwala is convinced that the partnership is in his hands.

Kankiwala spent most of his career in mainstream business, including Pepsico and Burger King. His most recent position was at Hovis where he negotiated a sale to private equity.

The buyout barons have a down-to-earth approach to business that goes against the ethos of the partnership. So he really married it?

“I am,” he emphasises. “I really feel that the partnership model is better and will be replicated elsewhere.”

Sadly, his parents have passed away and are not here to see their son take on one of the UK’s biggest retail jobs.

“My mom and dad would be very proud,” he says. “When I sold clothes in the market, we were poor. I am very privileged to be here because I came from nowhere. My sister is in India and she would say ‘You have a big store now’.