John Lewis has ditched its “never knowingly undersold” pledge to match prices, which it said no longer fits with customers who increasingly shop online.
The employee-owned department store chain said the promise, which has been in place for almost 100 years, was from a different era.
The promise allows customers to shop around for a cheaper deal elsewhere on the high street which John Lewis will match.
It does not apply to online sales and is only used by around 1 per cent of customers.
John Lewis said it would invest £500m in keeping prices lower as customers tighten their belts to a squeeze on living costs.
It suggested that more customers would benefit from its new approach than the existing price promise.
Martin Lewis, founder of Money Saving Expert (MSE), said the announcement marked an “historic change” for the John Lewis brand, but wouldn't affect many customers.
“The ‘never knowingly undersold’ promise has always been a bit of a psychological sop to consumers, giving an arguably false impression that John Lewis is cheap.
“In reality, it allows the store to charge what it likes and know that, for a few price-sensitive shoppers – less than 1 per cent last year – who are bothered to check prices elsewhere after making a purchase, John Lewis will reduce its price but only to that of its high street competitors.”
John Lewis initially revealed it planned to review the promise in 2020. Traditional department stores have come under increasing pressure from online rivals such as Amazon which face lower costs for real estate, business rates and staff.
The partnership’s chair Sharon White has sought to diversify the brand, with proposals to build 10,000 rental homes on its land and become a landlord.
The partnership said it expects shoppers to become more price sensitive this year as the cost of many household essentials is pushed up.
John Lewis executive director, Pippa Wicks, said: “Customers are tightening their belts and we're responding so John Lewis is more affordable for every customer, every day whether shopping in-store or online.
“Never knowingly undersold has been a cherished sign of trust for John Lewis for a century but it doesn't fit with how customers shop today as more purchases are made online.
“Our new £500m investment means all our customers can trust they're getting the quality, style and service they expect from John Lewis at great value prices.”
