Last week The Times reported that John Lewis has pulled the plug on its brand stretch into build-to-rent housing (1). The UK retailer had planned to develop thousands of houses on land next to Waitrose stores. This was part of former chairwoman Sharon White’s strategy to generate 40% of annual profits by 2030 from ventures outside the core retail business (John Lewis department stores and Waitrose supermarkets). However, the plan has now been scrapped. The move signals a clear strategic shift under chairman Jason Tarry to get back to basics and focus on core retail.
John Lewis’ reset offers some useful reminders about the need to keep the focus on the core and stretch strategically and selectively.
1. BE REAL ABOUT YOUR “ABILITY TO WIN”
The John Lewis case highlights an issue that many teams seem to have when assessing brand stretch opportunities.
Marketers are usually good at assessing the size of the prize. Concept and product testing help answer the question: would people like this idea? In the case of John Lewis housing, it’s easy to imagine the concept performing well. The brand is highly trusted, strongly associated already sells furniture and homeware. The idea of renting a “John Lewis home” could easily feel reassuring and appealing.
However, where many brand stretch attempts fall down is not the attractiveness of the idea, but the ability to win. John Lewis knows how to build and run department stores, curate product ranges and deliver customer service, capabilities developed over decades. Property development, in contrast, involves very different skills: construction management, complex financing, long investment cycles and ongoing asset management.
The lesson for brand builders is that evaluating a stretch requires answering two questions, not one. First, what is the size of prize? Second, and often more importantly, do we have the ability to win?
2. BUILD A “BRAND ECOSYSTEM”
The best brand stretches don’t just create a new revenue stream. They help build a brand ecosystem, where the new offer actively strengthens the core business. Apple’s iPhone is a classic example. Originally a stretch beyond computers, the iPhone drove huge traffic into Apple Stores. Once there, many customers also ended up buying a compatible Mac computer, reinforcing the core business.
In theory, John Lewis housing could have worked in a similar way. “Entering the ‘build to rent’ market also allows us to furnish properties using John Lewis Home products and deliver Waitrose food,” explained Sharon White back in 2020 (2). However, the link between the stretch (housing) and the core (retailing) is relatively weak and indirect. Unlike the Apple Store experience, where products sit side by side and purchasing is immediate, the housing connection involves multiple steps and a longer time horizon.
A more direct stretch from John Lewis is the in-store interior design service it has launched. This creates a new source of revenue while also making the core offer of home furnishing more attractive. By helping customers design their homes, the service naturally leads to purchasing furniture and homeware in-store, strengthening the retail ecosystem rather than distracting from it.
3. BEWARE THE DANGER OF DISTRACTION
The risk with brand stretch initiatives is that they end up distracting attention from the core that built the brand in the first place. Top talent’s time is limited. Investment budgets are finite. So, every new initiative competes for these valuable resources with the core business. If the new project fails to deliver fully, it can absorb significant resources while offering little return.
In John Lewis’ case, the property venture faced a number of challenges that made growth harder to create. Market conditions changed, funding became harder to secure and local planning issues added complexity. The company had to make a difficult choice. Was the new housing business “a toddler”: a small child who would, one day, grow to be big and strong? Or was the new venture doomed to always be small? The pragmatic decision was to walk away and refocus on the main engine of growth: core retail.
4. RE-FOCUS ON THE CORE
Alongside cancelling the housing scheme, John Lewis is investing heavily back into retail as part of a strategic reset under Jason Tarry, the former Tesco executive who took the top job in 2024. The group has announced a substantial £800 million retail investment programme, including a tie-up with fashion retailer Topshop, in a drive to win back customers and restore profits. It is also investing £1 billion in Waitrose’s 320 shops.
This approach aligns with one of our core principles: the biggest growth opportunities often lie in the core business. This makes what is strong even stronger and does this without adding complexity. In retail this might involve:
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improving product ranges and curation
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upgrading store environments
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enhancing service and expertise
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investing in omnichannel experiences
In conclusion, John Lewis’ decision to exit the build-to-rent venture is a good example of re-focusing on the core. By killing a complex innovation project and investing back into core retail, the partnership is re-focusing on the core business that built the brand. For brand builders, the lesson is clear: when growth is the challenge, don’t just think outside the box (core), also try to make the box bigger!
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