Evaluation of John Lewis using Key Performance Indicators (KPIs)

This report provides a comprehensive analysis of John Lewis's Key Performance Indicators (KPIs). It begins with an introduction to John Lewis, a major UK department store, and explains the significance of KPIs in measuring business performance. The report then presents a relative measure of John Lewis's performance, comparing it to Marks and Spencer, covering aspects like customer satisfaction (Net Promoter Score, customer profitability, retention rate), financial performance (revenue growth, profit margins, debt ratio), and internal factors (capability utilization, project variance, order fulfillment). The analysis includes 20 specific KPIs, categorized into customer, internal, financial, and employee metrics. Furthermore, the report evaluates John Lewis in comparison to Marks and Spencer, highlighting strengths and weaknesses in areas such as customer service, store layout, and financial performance. The report concludes with a detailed list of 20 key performance indicators, offering a framework for evaluating John Lewis's performance across various aspects of its business operations.

KPI's Research

Table of Contents
INTRODUCTION................................................................................................................................3
1 Relative measure for John Lewis .................................................................................................3
2. Evaluation of John Lewis with Mark and Spencer Pvt. Ltd. ......................................................5
3. The 20 Key performance indicators (KPI) ..................................................................................6
4. Research note of John Lewis company with data and figures on 20 KPI's.................................8
CONCLUSION..................................................................................................................................10
REFERENCES...................................................................................................................................12

INTRODUCTION
One of the biggest established department store operating in UK is John Lewis which was
establish in mid-1800 (Alwaer and Clements-Croome, 2010). It's well known retail sector in UK
and have 46 stores throughout the UK. The following document contains details related to the Key
performance Indicator (KPI) of John Lewis Ltd. KPI is used to measure the business performance
and objectives of the company effectively. This helps in identifying the specified goals and
objectives of the company. In the following document relative measure of the company are
identified and it is compared with the Marks and Spencer Group p. L.C.. Then 20 key performance
indicator for the John Lewis is created. At last final research is done on the current data and figures
of John Lewis. KPI are divided into four major business parts which are measure and understanding
of customer, internal, Financial and employees. Through this company market details along with
market value can be easily identified.
1 Relative measure for John Lewis
The organization use to focus on various financial and non- financial KPI. This are used by John
Lewis in order to analyze, evaluate and monitor the business performance along with achieving
goals and targets.
Measuring and understanding of Customer: John Lewis considered there customer to be everything.
They understand the customer demands and their current behavior through which they makes
required changes in the organization. The company's lead objective is to identify new innovation
and better strategic introductions to the customer. John Lewis product has grown the market share
due to customer belief (.Caniato, and et.al ., 2012).
The net promoter score ( NPS) of John Lewis is mentioned having increment from the previous
value. In the year 2016 NPS was +29 while in 2017 it increased up to +34 for Waitrose while for
John Lewis its +59 to +62 in 2017. NPS is used to measure the interest of the customer in
recommending the product and service of the John Lewis. If there is positive hike in those values
that mean customers are highly loyal and are satisfied with the product
Other measure which are Growth in customers shopping across both brands which raised from 4.7%
to 5%.
Customer Profitability score is used to identify the individual customer bringing profit to the
organization. Waitrose had increment from 2.3% to 2.8% while John Lewis had downfall from 4.6%
to 0.7%.
Customer retention rate which describes as the customer frequently coming back to the store. Here

Waitrose had downfall from 1.3% to 0.2% and John Lewis had fall from 3.1% to 2.7%.
Measuring and understanding Financial:
Revenue Growth Rate is used to define the income level of the company. Complete growth of the
company increased from 2.5% to 3.2% in the year 2017.
Net profit can be calculated as income left after eliminating expenses. The company earned the
partnership profit per average FTE which was 4800 Pound to 5800 pound.
Net profit margin of the company increased from its initial values to few figures upward.
Gross Profit margin of the company rise from 370Million Pound which is 21.1% . there was
decrease in the profit growth due to pension accounting charges. This is expected to reduce in the
price up to 1.9% of its initial values (Fotrousi and et.al., 2014).
Debt ratio of the company decreased from 4.4x to 4.0x which is beneficial to the organization.
Measuring and understanding Internal factors:
Capability Utilization rate is used to identify the potentiality the employees in the company. The
company is having the best employees and the service provided by then are too great.
The company is known for its project schedule variance. The employee contribution to the company
has made the company to achieve all its product in time. This made great large profit and good
market value of the organization.
Project cost variance: The company is receiving the project through various shareholder and
customers and is under the budget. Through the contribution of the employee and other members of
the firm the organization is easily able to complete its project.
Earned Value (EV) metric: The company has high market values in UK and to the other countries
where its expended its business. Also, the company is organizing to expand its business to all over
the world.
Order fulfillment cycle time (OFCT) through the online marketing and other technology people can
easily purchase the product online and the rate of the order of the customer has increased from the
previous year.
Delivery in full, on time (DIFOT) rate: The product made by John Lewis are high quality and
durable. There are advance delivery option available to the customer. Now customer can order
online and pay the price afterwards. Customer service of John Lewis is fast and they deliver the
product to the accurate place within time limit.

Quality Index: Customer feedback to the organization is positive and there is great demand of
product of John Lewis in the market. The quality offered by the company is high quality and
durable nature.
Process downtown Level: John Lewis have more than 88600 employee in 2016. The service of the
company if hardly affected by the staff sickness. The technical staff is always there to support the
organization in every possible ways (Hsieh and et.al ., 2010).
Measuring and understanding Employees:
Staff Advocacy Score: Company take full care of the employees and the other staff of the company.
People used to recommend for the company and are likely to work for the company due to the such
a favorable nature of the organization.
Employee Engagement level: Employees are the heart of the organization and they must be taken
care. The employer working for the organization are cooperative in nature and are very supportive.
They are ready to make full contribution of their to the company. Also, they help other employees in
order to complete the task as soon as possible. This also build relation between the employees.
Absenteeism Bradford Factor: The company has provided fixed paid leaves within a year which is
given to every employee so that they can utilize in there appropriate way. The Business of John
Lewis is not affected by the staff absenteeism as other employees fulfill there place.
Human Capital Value added (HCVA): Every employee contribution has made the company to the
largest retail company in the UK. The financial value of the organization has increased due to all the
employees working in the John Lewis ltd.
360 degree feedback Score: The services provided by the organization and staff of John Lewis are
very positive. Also, the customer feedback to the service of the staff are positive.
2. Evaluation of John Lewis with Mark and Spencer Pvt. Ltd.
The average values when compared with the Marks and Spencer was found that John
Lewis is making little profit. The service to the customer and the staff by the both the companies are
remarkable and with such civility (Mithas, Ramasubbu and Sambamurthy, 2011). The services
provided by the John Lewis needs to be upgrade and there should be adaptation of new
methodology in order to sell more product. M & S is providing the latest trends and new variety of
clothes to the customers. But John Lewis is having very comfortable,reliable and helpful service at
their store. The company service every costumer with great pleasure. In terms of the layout John
Lewis is having greater features than the M &S. Compared to any thing like Fashion, home ware,
food, customer service John Lewis is providing better service to the employees and to the staff

members. Both the companies are expanding there business world wide and are earning profit.
Business expansion with customer care is the primary aim of both the company. Both company are
getting financial up lift in there business sectors. The company also focus on the employee
contribution to the company and provide incentives and other benefits to the company. Both the
company have measured the key performance factor in order to increase the market value. This also
help the organization to focus on there goals and to achieve the required objective. Both the
companies have increased profit rate along with increase in the income rate.. Through the report of
the KPI it was identified that m & S has more international stores than John Lewis. The company
has revenue collection which are equal to both the companies. It is nearly around 11000 million
Pound as seen 2016. the company M & S is having more net operating income due to over
expansion of business all over the world. But the number of employees in John Lewis are more than
M&S due to higher service and better services provided to the staff members. Overall, both the
companies are having there profit in there own respective and have high market values. KPI
research helps the company in order to achieve there goals more comfortably and in effective ways.
3. The 20 Key performance indicators (KPI)
Key Performance Indicators means the metric methods which are used by the organization to
evaluate its performance and growth(Alwaer and Clements-Croome, 2010).
The key performance indicators for John Lewis Partnership are:
1) Sales: John Lewis need to measure its sale and measure whether it is enough to meet all the
expenses and also earn the net profit
2) Marketing expenses: John Lewis can derive whether the company is getting customers
according to the expenses being made on the advertisement and market research(Caniato and
et.al ., 2012).
3) Customer satisfaction: Satisfied customers brings sustainability and growth to the organization.
John Lewis can find out through feedback whether the customer satisfaction. Unsatisfied
customer will not return to store during its second shopping.
4) Brand awareness: John Lewis can measure the brand awareness in the following three factors:
Awareness of the store, Consideration of the store while purchasing, actual purchases being
made by the customer(Fotrousi and et.al ., 2014).
5) Number of customers: It will determine whether John Lewis is able to meet the needs of the
customers
6) Pace of innovation: John Lewis can measure the pace of innovation based on the science and

technology, innovative marketing campaign, change in the store decor and feel.
7) HR development: It is measured on the basis of training session to the staff, incentives,
employment engagement rate, compensation etc(Hsieh and et.al ., 2010).
8) Cost: This factor will help John Lewis to focus on the cost so that key measures can be taken to
reduce it.
9) Inventory turnover: It measure the frequency of sale of the stock. It is important for John Lewis
to know what is sold, what is sold and what more stock is required.
10) Discounts: However, discount reduces the profit margin on each product but it will help in
increasing the sales and customer base of John Lewis(Mithas, Ramasubbu and Sambamurthy,
2011).
11) Marketing Campaign: The increase in customers and sales after the marketing campaign
signifies the benefits achieved by John Lewis.
12) Margin per customer: It is the margin of profit earned by John Lewis from each customer. John
Lewis can calculate it by Revenue Minus cost divided by the number of customers.
13) Foot traffic: Number of people available in the store at a given point of time describes the foot
traffic of John Lewis.
14) Profit margin: profit margin can be calculated by revenue from minus cost. It is the most
important factor to measure the growth.
15) Working capital: Assessing the working capital by subtracting current liabilities from current
assets to evaluate the financial health to avail short term liabilities.
16) Return on investment: ROI shows the return on the investment made. John Lewis can calculate
the ROI as net Profit divided by Total investment, multiply by 100.
17) Employment Productivity: John Lewis can find out the efficiency of its employees by dividing
the revenue from total number of employees.
18) Employee turnover rate: John Lewis can calculate employee turnover by dividing number of
employees left the company by average number of employees in order to find out work place
culture and packages(Pan and Wei, 2012).
19) Conversion rate: When a customer shift to the other brand. It examine the brand switchers.
Improving the conversion will help to retain customers.
20) Sales by region: John Lewis will analyze the regions which are meeting the sales objectives and
provide feedback to the regions with under performance.

4. Research note of John Lewis company with data and figures on 20 KPI's
Research note of this company includes the factors like Revenue growth rate, net profit,
sales, net profit margin, gross profit margin, return on investment or more. This report includes
data and figures on above KPI's of John Lewis company(Searcy, 2012).
Revenue: Revenue of this company is changes according to the demand of the customers and also it
is related to the quality rate and production rate as well. The biggest competitor of John Lewis is
Waitrose and has an effective impact on the production rate of the company as well as their
services(Parmenter, 2015).
Comparison in between Waitrose and John Lewis is given below:
statements 2017 £m 2016 £m
Gross sales
Waitrose 6633.2 6461.4
John Lewis 4741 4557.4
Revenue
Waitrose 6245.5 6086
John Lewis 3780.7 3662.8
Sales growth: The sales growth rate of this company is increases and the percentage of that sales
growth rate in year 2017 is that 3.2% and in year 2016 it is 2.5% as well. According to the KPI's
research net promoter score of this company is that increasing like in year 2016 the score is 59 and
in year 2017 this score changes to 62.
1) Marketing expenses: Marketing rebates in the form of promotions and mark down values are
provided by the John Lewis
2) Customer satisfaction: John Lewis shares very good image in terms of customer satisfaction
rate It delivers excellent level of satisfaction to its customers. An increase of 2.5% is seen in
their best customers. Best customer are those who spend more than their regular spending
3) Conversion rate: John Lewis needs to change its marketing strategy because conversion rate of
customers is high. Availability of various other brands with more attractive and high customer
satisfaction value is the major reason of high conversion rate.

4) Brand Awareness: Company is working quite hard in creating the brand awareness by
continuously organizing various programs and camps with various social message such as
Information security and data privacy awareness campaign, time to change campaign.
5) Pace of innovation: Company is focusing on increasing productivity and restructuring. The
current main objective of the company is to pace up its innovation. John Lewis is also working
on digital innovation and development of new business models(Shen, Wu and Zhang, 2010).
6) HR development : A committee has been formed in order to protect the rights of employees.
Proper benefits in monetary and non monetary terms are provided to the employees. There is an
68% of satisfaction among partners
7) Inventory turnover: Inventory turnover ratio is £m21.62 in comparison to the last year data
which was £m20.43. It shows the company has sold and replaced its inventory. Increase in
inventory turnover ratio signifies higher sales(Shen, Wu and Zhang, 2010).
8) Discounts: There is a reduction in partner’s discount being provided by John Lewis. The
discount varies from £m 74.7in 2016 to £m73.4 in 2017.
9) Marketing Campaign: Various marketing campaigns are organized by John Lewis such as, time
to change campaign supporting mental health, it also organized cancer awareness month to
spread the awareness for breast cancer.
10) Return on investment: The ROI earned by John Lewis is 8.1%. However, there is an increase in
ROI in comparison to the last year which was 7.1%. It is a positive indicator for the company.
11) Number of customers: There are 48 John Lewis shops with approximately 13000 suppliers in
2017.As there is an increase of 5% in the number of customers, it shows a growth in the
customer data base.
12) Profit margin: Profit for the year 2017 has increased from £m 223.2 to £m 353.5 in 2016. It
shows tremendous growth in the profits of John Lewis.
13) Working capital: working capital is used to conduct the day to day activities of the
organization. The company does not possess any working capital since, the amount for the
years that is for 2017 and 2016 are in negative. The negative working capital for 2016 is£m 314
while for 2017 is £m 206.6. It has come to decrease which is a good sign.
14) Foot traffic: As John Lewis carry a very good image in the market. The foot traffic is high.
More confident customers are emerging for the company.
15) Employment productivity: Each staff member generate profit for approximately 5000 in the
current financial year 2017. It has done exceptionally well in comparison to other companies in
the market.

16) Employee turnover rate:Employee turnover rate is high in the company. The company is laying
off its employees. Bonus of employees is also been affected.
17) Sales by region: There is a growth of 3.2% in sales in comparison to 2016 which was 2.5%.
The biggest departmental store of john Lewis is at Oxford street, UK.
CONCLUSION
KPI's research is the most important factor in each and every organization to find the current
market status of that particular company and this type of indicator helps the organization to improve
their performance as well as growth rate. Furthermore, this report includes the several factors that
used to improve the company's status and the brand value in the recent market. These factors are;
revenue, gross profit, expenses, market shares, number of customers, profit margin, return on
investment or more. This report also includes customer's demand and relative market share,
customer retention rate, customer profitability score, net promoter score or more. Conversion rate
also effect the business of the organization so it is clear that these indicators plays a vital role in
achieving the success at great extent. This report also conclude that status of the Waitrose which is
the biggest competitor of the John Lewis company and then this report measure its key performance
indicators which are major factor in the performance of the organization.
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