The John Lewis Partnership is Britain's most successful retail store. Despite Britain falling into a double-dip recession and retailers like Comet going into bankruptcy, John Lewis, which consists of a chain of department stores plus a chain of upmarket supermakets (Waitrose), reported a 60% increase in profits.
Their secret is that while they provide a very high-end upmarket service and quality (competing with Harrods and Selfridges in their department stores), they also have a policy of never being knowingly undersold - which means they match the prices of Amazon in their department stores and match Tescos in their supermarkets, despite providing better (almost gourmet) quality food. If you are buying white goods for example, it's always worth buying from John Lewis because the prices are the same as everywhere else, but they'll deliver free and then go the extra mile and help you install your new machine, provide guarantees and whatnot .
The other "secret" is that this store is owned by it's staff - hence the word "partnership". John Lewis, the founder, left the store to his staff in his will - he felt the structure was an "alternative to communism" - he took over John Lewis from his father in 1928 when communism seemed like it would spread across Europe. (He also left his 4000 acre estate to the staff for their use and enjoyment).
Despite John Lewis beating every other retailer in sight in terms of profits, customer satisfaction and growing market share, other retailers are still reluctant to copy their ownership and management model (one of the rules of the partnership is that the chairman can never earn more than 25 times the salary of a shop floor salesman - which means that if he wants to earn more he must either raise everyone's salary or increase profitability so he gets a bigger bonus - which is a different situation from other companies where managers are paid massive multiples of the ordinary salary while not producing profits), preferring to believe that if they just squeeze employee benefits a bit more, they can outpace the "partnership". But they never do.
The BBC did a documentary about John Lewis in 1995, covering their unusual worker democracy and profit share.
It's a compelling documentary and if you arn't busy this Sunday, grab a cup of coffee and watch it. The partnership model definitely works in that it delivers well paying jobs, good service and keenly priced high quality goods to customers plus profits which then get shared among the staff. The question is how to persuade other retailers to abandon short-term greed in order to gain the long term benefits of this model.
The cutest thing about the video is how they are debating and voting, in 1995, in their "partnership democracy", whether gay couples and co-habiting couples should be entitled to the same store discounts given to married John Lewis customers. Bless. In their old-fashioned shopkeeper way, the John Lewis Partners were and are decades ahead of many parts of the world!
The other cute thing about this documentary is how the partners are moaning about things that are beyond the wildest dreams of employees at places like Walmart. Of course the partners know deep in their hearts how lucky they are - the John Lewis Partnership has a very low staff turnover - why on earth would you leave to go elsewhere with less pay, no say in how the business is run and no bonus? In March 2012, John Lewis staff got a bonus of 14% of salary for 2011 profits - and this was down from the previous year's bonus of 18% of salary (the drop was attributed to the recession - but it looks like their next bonus will rise again given their increase in profits in 2012).