The Impact of Brexit on the Profitability of John Lewis in the UK

This research analyzes the impact of Brexit on the profitability of John Lewis, a departmental store in the UK. It discusses the challenges faced by the company and the opportunities it can grab in the post-Brexit period. The research uses a qualitative approach and secondary data collection method to gather information. The SWOT and PESTLE analysis are used to identify the strengths, weaknesses, opportunities, and threats faced by the company. The research recommends that the company should focus on reducing the price of its goods to attract more customers and enhance profitability.

The impact if Brexit on the
profitability of John Lewis in the
UK

Table of Contents
INTRODUCTION...........................................................................................................................3
LITERATURE REVIEW................................................................................................................4
DATA COLLECTION APPROACH..............................................................................................8
RESEARCH LIMITATION............................................................................................................9
RESULTS AND DISCUSSION......................................................................................................9
RECOMMENDATION...................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Brexit is a situation when UK withdrawal from European Union and European Atomic
Energy Community. This research is based on the impact of Brexit on the profitability of
business. The chosen organisation for this project is John Lewis, it is a departmental store that
operates their business in Great Britain. The brand was founded in 1864 by John Lewis. They
generally targets upper and middle class people of age between 30 to 40.
Research Aim
“To identify the impact of Brexit on the profitability of business”. A study on John Lewis
Research Objective
 To determine the concept of Brexit and it affects on overall activities and functioning of
business
 To identify the impact of Brexit on the profitability and performance of John Lewis
 To discern the opportunities which are grabbed by John Lewis in post Brexit period
 To determine the key business challenges which are faced by John Lewis at the time of
Brexit
Research Questions
 What is the concept of Brexit and how it affects the overall activities and functioning of
business?
 What is the impact of Brexit on the profitability and performance of John Lewis?
 What are the opportunities which are grabbed by John Lewis in post Brexit period?
 What are the key business challenges which are faced by John Lewis at the time of
Brexit?

LITERATURE REVIEW
Areas of Failure
Disruption in supply chain:
It is one of the impact which is created by Brexit on business, it influences the supply
chain and business operation cost (Roscoe and et. al., 2020). Brexit has created a great impact on
the business as it increases the amount of material which is required for processing,
manufacturing and supplying the products and services. Organisation generally stockpiled before
Brexit for skipping tariff for importing EU goods. In order to continue good relation between EU
and UK business, it is necessary to offer transparency about any changes on tariffs. John Lewis
faced issues regarding the disruption of supply chain as they were not able to fulfil the need and
demand of customers in effective and efficient manner.
Decrease in EU workers:
Decrease in EU workers is another challenge which is faced by John Lewis in Brexit
period. The situation of Brexit has created a great impact on workers due to the end of freedom
of movement between EU and UK. Due to this issue, business won't rely on cheap labours and
also John Lewis has to invest in existing employees and apprenticeships (Ridgway, 2019).
Current trends and competition at that time
Digitalisation:
Digitalisation is one of the trend and competition at the time of Brexit. Digital technology
helps company to reduce the Brexit burden. It provides more hassle free and cost effective way
to run the business in significant manner in the tough time of Brexit. John Lewis is adopting
digital technologies such as artificial intelligence and robotics so that they can run the operation
activities in effective and efficient way (Rodríguez, Paredes and Yi, 2016).
Overseas Market:
Overseas market is another trend and competition at the time of pandemic, companies are
looking forward to improve their profitability and growth. The opportunity which is grabbed by
John Lewis at the time of UK withdrawal from EU is to trade globally. They can export goods
overseas in order to expand their reach and earn more and more profit. It also helps in increasing
the customer base by attracting maximum number of people (Sigarev and et. al., 2018). John
Lewis is focusing on expanding their business in other markets which helps in providing access
to export financing and longer product lifespan.

Model of Analysis
SWOT Analysis
Strength:
The strength of John Lewis is that it has good reputation in UK market due to its high
quality of goods and services. Organisation focuses on providing excellent customer service
which helps in increasing the profitability and growth of business. The brand also has strong
online presence which make ease for customer to purchase the products online (Grewal, Motyka
and Levy, 2018). In Brexit, company has maintained their performance by focusing on
digitalisation and increasing their omni-channel marketing.
Weakness:
The weakness of John Lewis is that they have limited awareness of brand outside the UK
market. John Lewis generally offers products at high price as compare to other supermarket and
grocery stores. The brand is also face decline in market share due to impact of Brexit. Company
is also facing issue regarding building new supply chain and logistic network.
Opportunity:
The opportunity which can be grabbed by John Lewis is lowering the cost of the products
and services when they sell products in overseas market. John Lewis can also focus on forming
strategic partnership in global markets in post Brexit so that they can expand their business
activity in effective and efficient manner and also become market leader in overseas market.
Threat:
The threat which can be faced by John Lewis is failure in new market due to cultural
differences. It becomes difficult for company to survive in competitive environment. The other
threat which is faced by an organisation is emergence of new competitors with stronger
competitive advantage.
PESTLE ANALYSIS
Political environment:
John Lewis is operating their business in different countries due to which it is important
to follow the rules and regulations of the country in which they operate. There are various
competitors of John Lewis entering in UK market. The UK government has also decided to
reduce corporate tax due to which company can generate more revenue.
Economic environment:

The UK economy is in recession due to Brexit and COVID 19 which influences the
performance and profitability of business. It also creates an impact on the price of John Lewis
due to which they have to pull their price down in order to attract customers.
Social environment:
The taste and preference of consumers are changing rapidly, due to which it is important
for John Lewis to introduce latest fashion products and more brands in order to satisfy the need
and expectation of consumers.
Technological environment:
In Brexit and COVID 19 situation, internet shopping has become trendy. People are
purchasing the product via online. John Lewis is focusing on investing in mobile technology and
artificial intelligence in order to improve their growth and performance.
Legal environment:
It is important for John Lewis to focus on the legal laws and protocols while running
business sin overseas market as it helps in staying away from any legal issues and conflicts.
Environmental Factor:
The brand focuses on gaining sustainable competitive advantage by reducing wastage,
eliminating carbon footprints, recycling and reducing greenhouse gas emission.

METHODOLOGY
Qualitative approach
Qualitative approach is one of the method through which researcher can conduct the
investigation in qualitative manner. It mainly focuses on accumulating and evaluating non-
numerical information in order to understand the experiences, concepts and opinions. Through
using qualitative approach, researcher can collect numerical piece of information in effective and
efficient manner. Investigator mainly uses qualitative approach for understanding the
experiences of people in the world (Ugur, 2020). There are various qualitative methods through
which researcher can collect the data are interviews, surveys, focus group, observation and
secondary research.
Advantages:
The advantages of qualitative approach are that it provides flexibility as researcher can
collect and analyse the data by adapting new ideas and emerging patterns. It also provides
meaningful insights about the experience, feelings and perception of people which are used by
investigator in testing, designing and improving the system.
Disadvantages:
The disadvantage of qualitative approach is that it is unreliable as it includes uncontrolled
factors that influence the information. Main role of investigator is to analyse and interpret the
data, but when researcher collects qualitative information it cannot be replicated.
Quantitative approach
Quantitative approach is another method of research which is used by the investigator in
order to gather and analyse the information in appropriate manner. By using quantitative
approach, researcher can measure test hypotheses and variables in systematic manner.
Quantitative research approach focuses on collected quantitative piece of information in the form
of numerical and statistical manner (Ahmadian and et. al., 2020). There are various methods of
quantitative research method such as experiment, survey, systematic observation and secondary
research.
Advantages:
The advantages of quantitative approach is that researcher can repeat the study due to the
standardised data collection protocols. Researcher can also collect data from large number of
samples by using consistent and reliable procedure through quantitative data analysis.

Disadvantages:
Through using quantitative approach, researcher narrow focus on the investigation due to
predetermined variables and measurement procedures which ignore other relevant observations.
Quantitative research approach fails to consider cultural and historic context that affects the data
collection and results.
Within this project, researcher is focusing on choosing qualitative information as it helps
in collecting detailed information related to the research topic in appropriate manner (Zhou, Yan,
Fu and Yao, 2018). It also covers the theories and concepts which are provided by different
people.
Primary data
Primary data is a tool through which first hand data is collected by the researcher. The
sources of collection primary data are survey, experiment and interviews.
Advantages:
Through primary data, researcher can provide more accurate and updates information in
effective and efficient manner.
Disadvantages:
The disadvantage of primary data is that it is time consuming process and also it requires
more cost in order to gather data.
Secondary data
Secondary data is another method of accumulating information in which researcher
collects second hand information which is provided by other people.
Advantages:
The advantages of secondary data are it is easily accessible and researcher can gather the
information in low cost and less time.
Disadvantages:
The disadvantage of secondary data is that researcher has no control on the data quality
and also it might not be specific to the need and requirement of investigator.
Within this research, researcher has focus on choosing secondary data as it helps in
providing valid and reliable information related to the current investigation. Through using
secondary data, investigator can gathers the data from existing study material, articles and
publications.

DATA COLLECTION APPROACH
Data collection approach is a tool through which investigator can accumulate data from
different types of sources. Through data collection approach, researcher can understand the
present investigation and also gathers the data accordingly (Mkandawire, 2019). It is mainly
categorised into two forms such as primary and secondary data collection method. Within this
research, investigator is focusing on choosing secondary research method as it helps in gathering
data by using different sources such as books, articles, publication, etc.
RESEARCH LIMITATION
Researcher has faced various issues and challenges while conducting the investigation.
There are various problems which are faced by researcher such as high cost, time consuming
process and lack of resources. These becomes barriers for investigator due to which it becomes
difficult to achieve the aims and objective of current study in effective and efficient time period.
RESULTS AND DISCUSSION
It is being analysed from the above discussed information that Brexit has created a great
impact on the profitability and performance of business. The uncertainty of Brexit affects the
operation activity and also causes volatility within UK market. The Brexit has influenced the
pricing strategy of retailers as in order to survive in market, companies are reducing the price of
their products and services. The brand generally offers high quality of products at premium price.
John Lewis has established their brand with huge capital and also created strong customer base.
Due to which it becomes difficult for competitors to bring new product and innovation in order
to remain competitive at the time of Brexit. Organisation also has strong customer base which
attracts suppliers to sell their products to John Lewis and have their products on the shelves of
the stores. John Lewis faces intense competition within UK Market as there are various
competitors of brand that offers products with different pricing strategy.
RECOMMENDATION
It is being recommended from the above information that the brand generally offers high
quality of products at premium price. Due to which the customers can easily switch the brand
that offers low price of products and services. It is necessary to focus on reducing the price of its
goods so that they can attract more and more customers and enhance their profitability. People

generally get attracted with low cost of products and services. It is necessary for brand to offer
discounts to their customer in order to attract them and retain loyal consumers.
CONCLUSION
From the above information it is being concluded that Brexit has impacted almost all the
industries as due to manpower issues and potential economic impacts. It affects the economy of
UK by reducing the per capita income level and GDP rate. Companies are adopting digital
technologies in order to increase their profitability and attracting more and more employees and
customer towards the brand. Thus, it becomes important for an organisation to focus on
attracting and retaining top performers so that they can contribute their best efforts in improving
the performance and productivity of business.

REFERENCES
Books and Journals
Ahmadian and et. al., 2020. A quantitative approach for assessment and improvement of
network resilience. Reliability Engineering & System Safety, 200, p.106977.
Grewal, D., Motyka, S. and Levy, M., 2018. The evolution and future of retailing and retailing
education. Journal of Marketing Education, 40(1), pp.85-93.
Mkandawire, S.B., 2019. Selected common methods and tools for data collection in
research. Selected Readings in Education, 2, pp.143-153.
Ridgway, M., 2019. Brexit: human resourcing implications. Employee Relations: The
International Journal.
Rodríguez, M., Paredes, F. and Yi, G., 2016. Towards future customer experience: trends and
innovation in retail. Форсайт, 10(3 (eng)), pp.18-28.
Roscoe and et. al., 2020. Managing supply chain uncertainty arising from geopolitical
disruptions: evidence from the pharmaceutical industry and brexit. International
Journal of Operations & Production Management.
Sigarev and et. al., 2018. The role of chains in the Russian retail sector.
Ugur, N.G., 2020. Digitalization in higher education: A qualitative approach. International
Journal of Technology in Education and Science, 4(1), pp.18-25.
Zhou and et. al., 2018. A survey on network data collection. Journal of Network and Computer
Applications, 116, pp.9-23.