Charlotte Street Partners



Never knowingly undersold

Written by Li-Ann Chin, associate 
Edited by David Gaffney, partner
22 October 2020

Good morning,

Last weekend, I did something I had not done in a long time. I walked into a – wait for it – department store. Having just landed in London from Malaysia to embark on his undergraduate studies, my brother was in search of homeware essentials. Enter, John Lewis.  

Personally, I’ve always been inclined towards the sheer convenience of online shopping. Indeed, the decline of the high street has seen online shopping in the UK develop into one of the biggest players within the retail sector. Data published by the Office for National Statistics reveals that the value of online retail sales in the UK experienced a steady growth from 2012 to 2019, rising from £33.24 billion to £76.04 billion last year. 

The pandemic has only accelerated the shift away from bricks-and-mortar stores to digital shopping. According to research conducted by Alvarez & Marshal in partnership with Retail Economics, an estimated 17.2 million consumers in the UK – nearly a quarter of the population – will permanently change the way they shop as a result of the pandemic, redirecting more of their spending online. This surge in online shopping is expected to add £5.3 billion to UK ecommerce sales this year, resulting in a total of £78.9 billion. In stark contrast, the first half of 2020 witnessed 11,000 retail outlets disappear from high streets across Britain, twice as many as in the same period last year. 

In a battle to recover its Covid-19 losses, John Lewis’ new strategy reveals that it aims to invest £1 billion in its digital services, as it anticipates that 60% of its future sales will be online. The remaining 40% is expected to derive from activities outside retail, such as its plans to sell home insurance, open garden centres, and even become a domestic landlord by building rental homes adjacent to Waitrose sites. The group is reportedly also planning to drastically reduce its London flagship store and convert the space into offices

Despite the shift to online, Dame Sharon White, chair of the John Lewis Partnership has cautioned consumers against writing off the high street prematurely. Defending the role of physical shops as important, White invoked the sofa example, highlighting how customers often prefer to “touch and feel” – and, I’m sure in many cases, stretch right out on – a sofa in-store before committing to a long-term relationship with it. There are echoes of this philosophy in Ikea’s experiment to install studios in various central districts, offering customers the chance to visualise and plan their rooms via 3D tools.  

Watching my brother flit nervously about the kitchenware floor, sizing up shelves laden with pots and pans in every size imaginable, it’s clear that even Gen Z’ers have a use for actual shops. With a highly unusual Christmas in prospect, it will be fascinating to see how consumers direct their spending during the retail sector’s crucial annual bonanza this year. 


The first quarterly report by the UK government on Covid-19 health inequalities found that the increased risks for black and South Asian ethnic groups has been largely driven by profession, deprivation and living circumstances and not genetics or structural reasons. However, the dynamics of whether certain groups are more likely to contract the virus due to external factors, or are more susceptible to it once exposed, are still unclear. 

Scotland will next month introduce a new tiered approach to dealing with the coronavirus. First minister Nicola Sturgeon yesterday extended the current restrictions for another week while confirming that details of the new approach would be published on Friday and the measures implemented from 2 November. 

According to a poll conducted by JL Partners and The Independent, nearly three-quarters of Americans are concerned about riots and violence after the presidential Election Day. Such fears appear directly linked to Americans’ concerns that it will not be clear by 4 November who has won the race to the White House.

A volunteer participating in clinical trials for the Covid-19 vaccine being developed by AstraZeneca and Oxford University has died, as confirmed by Anivisa, Brazil’s health authority. The trials will continue, however, as “no concerns about safety” were found in an investigation into the 28-year-old man’s death. (£) 

Business and economy

The UK chancellor Rishi Sunak is set to unveil further financial support for businesses in parts of England under Tier 2 coronavirus restrictions today. The package is aimed particularly at pubs, bars and restaurants. The chancellor’s new plans come after complaints from industry leaders that the tiered lockdown system is putting thousands of hospitality jobs at risk in the run-up to Christmas. 

The EU’s chief negotiator, Michel Barnier, indicated yesterday that a post-Brexit trade deal with the UK is “within reach” as he acknowledged that compromises would be needed by both sides to salvage the talks. Barnier is expected to arrive in London today to resume full trade talks, with the aim of agreeing a deal by mid-November. (£) 

Think tank The Centre for Cities has calculated that London would require more than £400 million a month in emergency funding from the government if it is placed in the top band of restrictions and if the city’s mayor,Sadiq Khan, made the same funding requests as Greater Manchester’s mayor Andy Burnham. 

Columns of note

Vietnam had all the ingredients for a Covid-19 disaster, with an 800-mile border with China, thriving informal trade via secret mountain trails and an under-developed healthcare system. And yet, only 35 deaths have been reported from the novel coronavirus. In The Guardian, Tran Le Thuy highlights how a depoliticising of the pandemic by the Vietnamese government has resulted in effective governance. 

The first lockdown of 2020 was characterised a surprising sense of calm, compliance and resilience in the UK. Months later, it’s a different and developing story. Data from the Office for National Statistics indicate that rates of depression have almost doubled, and the British Liver Trust has witnessed a six-fold increase in calls to its helpline. In The Times, Alice Thomson urges the UK government to take greater care of the nation’s mental health before it becomes the next epidemic. 

Cartoon source: Telegraph


What happened yesterday?

The S&P 500 Index was little changed as of 11:34 am New York time, with energy firms among the worst performers as oil fell. Social media companies fared better after Snap reported strong earnings, with Twitter and Facebook both up more than five per cent at one stage. The FTSE 100 ended the day down almost two per cent or more than 100 points, at 5,776 points.

Mounting optimism that a Brexit deal will be done with the EU sent the pound up about 1.5% to $1.3142. Similarly, the yen headed for its best day versus the dollar since August, strengthening 0.9% to 105.47 per dollar.

The yield on 10-year treasuries jumped two basis points to 0.8% while Britain’s 10-year yield climbed four basis points to 0.231%.

Gold strengthened 0.9% to $1,924.95 an ounce.

In company news: 

Manchester United suffered a £118.1 million loss in revenues, down to £509 million from £627.1 million, for the financial year ending in June 2019, with the impact of the coronavirus pandemic a major factor.

Apollo Global Management has hired an outside law firm to review the longstanding professional relationship between its billionaire founder Leon Black and Jeffrey Epstein. The announcement follows reports last week that Black made at least $50 million in payments to Epstein after he had been convicted in 2008 of soliciting sex from a minor.

Purdue Pharma will plead guilty to three charges and pay £6.9 billion to settle federal investigations into the way it marketed OxyContin, the addictive painkiller blamed for sparking the opioid epidemic.

HSBC has reportedly launched a restructuring of its commercial banking business in the UK that will result in 300 redundancies. 

Tesla delivered a fifth straight quarterly profit in the three months to the end of September, with revenues jumping 39% from a year ago to $8.77 billion, beating analysts’ estimates of $8.3 billion.  

What’s happening today?

Trading announcements
Anglo American
Rentokil Initial
Secure Trust

Alumasc Group
FRP Advisory

UK economic announcements
(07:00) Retail Sales

Int economic announcements
(13:30) Initial Jobless Claims (US)
(13:30) Existing Home Sales (US)
(13:30) Continuing Claims (US)

Source: Financial Times

did you know

The site of the Marks & Spencer branch at 173 Oxford Street once housed the Pantheon – an entertainment building designed to resemble the Pantheon in Rome. The building originally consisted of assembly rooms, followed by a theatre, then a bazaar and a wine merchant show room.

Parliamentary highlights

House of Commons

Oral questions
Transport (including Topical Questions)

Business Statement
Business Questions to the Leader of the House – Mr Jacob Rees-Mogg

General debate

Down syndrome awareness month – Dr Lisa Cameron

House of Lords 

The Lord Archbishop of York

Oral questions
Role of alms-houses in the provision of housing for the elderly – Lord Kennedy of Southwark

Impact of the COVID-19 pandemic on the gig economy – The Lord Bishop of Oxford

Commission for Victims and Survivors for Northern Ireland and proposals to address the legacy of the Troubles in Northern Ireland – Baroness Ritchie of Downpatrick

Report from the Procedure and Privileges Committee ‘Leave of absence; Committee rotations; Changes to procedure relating to legislation; Deletion of Standing Order 76; Wording in the Companion relating to “the closure”; Changes to Standing Order 64; and Legislative consent’ – Lord McFall of Alcluith

Orders and regulations
Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020 – Lord Bethell

Criminal Procedure and Investigations Act 1996 (Code of Practice) Order 2020 – Baroness Scott of Bybrook

Citizens’ Rights (Application Deadline and Temporary Protection) (EU Exit) Regulations 2020; Citizens’ Rights (Frontier Workers) (EU Exit) Regulations 2020; Citizens’ Rights (Restrictions of Rights of Entry and Residence) (EU Exit) Regulations 2020 – Baroness Williams of Trafford

General Synod (Remote Meetings) (Temporary Standing Orders) Measure – motion to direct that the Measure be presented for Royal Assent – The Lord Bishop of London

Scottish Parliament 

No business scheduled.

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