Supercharging a revival: Nish Kankiwala has retail in his blood
Retail is in the blood for Nish Kankiwala, the former Hovis boss who has become the first-ever chief executive of the John Lewis Partnership, owner of the department store chain and Waitrose grocery stores.
His family came to the UK from Mumbai, India, in the 1960s.
At first his parents couldn’t afford for Kankiwala and his sister to come to London, so the children stayed with their grandparents who had six sari shops.
‘I used to go to the shops on the way to school,’ he says. ‘I love 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 fabled haberdashery and dressmaking departments.
Kankiwala originally had a clothes stall on Walthamstow market in east London.
He was also running the family’s shop attached to a Post Office in Tottenham, north London, when his father fell ill, while he was studying for his degree at University College London. ‘I did engineering, but I couldn’t escape my retail destiny,’ he laughs.
Kankiwala finds himself back on the shop floor in one of the hardest jobs in the industry – restoring John Lewis and Waitrose to their former status. The two chains were once synonymous with quality, service and being the undisputed destination of choice for Britain’s middle-class shoppers.
Waitrose, for example, was the first British supermarket to sell hummus – in the 1980s – and sushi – in 1996 – as well as being the first to offer organic produce.
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 value range with more than 900 ‘Essentials’ products.
Though its middle-class credentials still run deep, there is even an ‘Overheard in Waitrose’ satire on social media, poking gentle fun at the pretensions and foibles of the customers. But the business has struggled in the pandemic and the rampant inflation that followed.
Underlying those problems, which hit the retail sector as a whole, the department stores seemed to lose their mojo when faced with tough competition online and elsewhere on the high street.
John Lewis, the largest employee-owned operation in the UK with 74,000 partners, dropped its ‘never knowingly undersold’ policy, a move that would once have been sacrilege. Even its well-heeled customers are more hard up.
‘The Bank of England wants to make people feel a bit gloomier so they spend less, and it is working,’ says Kankiwala pointedly.
‘If you look at previous booms and busts sometimes it goes too far and we tip into recession. The trick is to avoid that. But that is for the bank. I just 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 is also looking at offering Klarna-style payments by instalments, which are often associated with lower income consumers. ‘I think we will develop a buy-now-pay-later product,’ he says. ‘Especially in the younger generation, people expect it.’
Kankiwala, who was a non-executive for two years before becoming chief executive officer, will be working alongside chairman Dame Sharon White to try and restore the partnership’s place in the nation’s hearts.
They have their work cut out. Losses for last year were £234 million and partners have had only one bonus in the past three years.
The hope is that installing Kankiwala as the first chief executive of John Lewis and Waitrose will supercharge the revival. Previously, the two chains had separate bosses, each reporting to the chairman.
‘We have never had a CEO,’ Kankiwala says. ‘In the old days we had two of everything. We have brought together all the functions and they all report to me now.’
Kankiwala’s task is to implement the recovery strategy – called the Partnership Plan – drawn up by White three years ago. The five-year blueprint aims to reduce costs, improve service and branch out into areas such as financial services and high quality rental housing.
The target is to make £200 million profits in the next two years and £400 million by 2025. Along the way, White has pledged to bring back partner bonuses when profit hits £150 million and debt falls.
But given the downturn in the economy since the plan was put in place, is this still realistic?
‘We are midway through it,’ he says. ‘We have had the cost of living, rising utility bills and an additional £180 million of costs.
‘It means we need to go even harder in some areas of the plan where I can bring my skills into play. Number one – I am fixated by customers. Growing up as I did, I can think of a thousand examples of learning from customers because they tell you the truth, though you might not like it.
‘Number two is cost. With all the extra expenditure coming out of the business we really have to make sure we are 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 supercharge is technology. We’ve not invested as fast as we should have.’
Despite three years of losses, he believes he can still hit the profit targets. ‘I broadly think they will be achieved by taking out more costs,’ he says.
‘When the previous team did the work, their assumption on inflation was about 3 per cent. We have taken out £300 million of costs already. This year we will probably take out £100 million.’
‘In procurement, we can do better. But we want to do it sustainably, not just slash.’
John Lewis has shut 16 shops since the pandemic, resulting in over 2,000 redundancies. And nine Waitrose shops have been closed, leading to more than 500 job losses. Kankiwala says there are no plans to shut any more shops.
When White talked in March about the possibility that there might be more implications for jobs, she meant by natural turnover. No redundancies were announced.
As for reinstating bonuses, he says staff are more concerned about higher basic wages. Partners have been promised they will be paid at least the Real Living Wage of £10.90 an hour – or £11.95 in London – once profit is over £200 million. Customers may be surprised this was not already the case.
There have been suggestions that the plight of John Lewis had become so desperate that White was prepared to dismantle the partnership model in order to bring in new investment. Kankiwala, however, is adamant that the partnership is safe in his hands.
Kankiwala spent most of his career in the mainstream corporate sector including Pepsico and Burger King. His most recent role was at Hovis, where he negotiated a sale to private equity.
The buyout barons have a hard-headed approach to business that is inimical to the partnership ethos. So is he really wedded to it?
‘I am,’ he insists. ‘I genuinely feel that the partnership model is a better one and will be replicated elsewhere.’
Sadly, his parents have passed away and are not here to see their son take one of the biggest jobs in British retail.
‘My mum and dad would be really proud,’ he says. ‘When I used to sell clothes on the market, we were poor. I am very privileged to be here because I come from nothing. My sister is in India and she would say ‘You have a big shop now’.’
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