John Lewis's refurbishment of its Bluewater store will involve the conversion of the basement into new retail space, which will include the chain's first foodhall outside London. With John Lewis Bluewater's sales currently down on last year, the opening of the foodhall next summer could provide a significant boost to trading at the location, which is one of the retailer's larger stores.
John Lewis Bluewater is to undergo a GBP20m refurbishment, which will expand available retail space and introduce a foodhall. The Oxford Street branch has already benefited from the opening of such a facility and John Lewis's decision to install the next foodhall in Bluewater, rather than the upcoming Cardiff outlet as originally mooted, may be a response to declining sales at this flagship store.
A key advantage that Bluewater holds over Oxford Street is its accessibility for drivers. The scarcity of car parking spaces at Oxford Street restricts customers to buying a handful of items. Bluewater, however, has 13,000 spaces, meaning customers are able to do a more complete shop thus generating a greater average transaction. For the 26 weeks to July 26, 2008, Oxford Street reported a sales uplift of 10.2%, mainly driven by the foodhall, and the opening of the Bluewater outlet's foodhall should have a similar impact on performance.
North Kent is one of the few areas in the south of England where Waitrose, John Lewis's supermarket division, does not have a major presence. Indeed, there are only three stores within a 10 mile radius of Bluewater, in Dartford, Longfield and Orpington. By opening a foodhall, John Lewis would grow its food sales in the area without cannibalizing sales from a local full line store.
Furthermore, there is little competition in the area, with Marks and Spencer being the only retailer in the center with a similar offering. While the size of John Lewis's foodhall is currently unknown, it is likely to be larger than Marks and Spencer and offer a deeper range, and it is certain to take sales from its competitors.
The Bluewater foodhall should be a tremendous success. The double digit growth in sales at Oxford Street shows the impact a foodhall can have on a store and with the potential for higher average transactions, the store should exceed this growth rate. With sales at John Lewis Bluewater for the first half of 2008 down by 6.9% on 2007, the opening of a foodhall in 2009 will provide the store with a much-needed sales boost during the quieter summer trading period.
Source: Verdict Research