Buy now, pay later for a service to the downtrodden middle class

Nish Kankivala was named the first CEO of the John Lewis Partnership in March. Photo: John Lewis Partnership/PA

John Lewis's boss and Waitrose want to start buying now and pay for service later as middle-class customers are increasingly hit by the cost-of-living crisis.

Nish Kankivala, the first chief executive of the John Lewis Partnership who took over in March, said younger customers “expect” to buy now, pay later (BNPL) and said the department store will likely develop its own version of the service.< /p>

BNPL allows people to borrow money without interest to make purchases. Clients then make a series of payments over several months to pay off the debt.

The lending product, pioneered by companies like Klarna, has become very popular in recent years, especially among young women. .

John Lewis is already offering interest-free credit on purchases of furniture and nursery items over £500, allowing them to repay the loan within 12 months.

However, Mr Kankivala's comments suggest that the department store may introduce installment payment for lower value items. Buy Now, Pay Later credits are typically used for items such as clothing and footwear rather than high-value items.

This comes as John Lewis's traditional middle-class customer base is shrinking due to the cost of living crisis. and Jeremy Hunt's hidden tax raids.

According to the National Institute for Economic and Social Research (NIESR), the middle class earns around £2,500 a year due to the pandemic and the cost of living crisis. earlier this year.

John Lewis is also looking for ways to boost his productivity after losing more than £200m last year.

Mr Kankivala told the Mail on Sunday: “I think we will develop a buy now, pay later product. People expect this, especially from the younger generation.”

A spokesman for John Lewis said the partnership has no plans to launch a BNPL service anytime soon, but confirmed that it makes interest-bearing loans for large purchases such as televisions. and computers.

The company has launched on-site loans, charging an interest rate of 16.9% per annum on purchases made online, and plans to offer them in-store from the fall. Loans will also be provided to cover the cost of furniture and household goods.

The spokesperson said the new loans will “help clients by spreading costs over a longer period.”

Aspirations for BNPL services are being provided , despite the looming threat of regulation from the Labor government.

Tulip Siddiq, the party's shadow city minister, called for increased regulation of BNPL services in a letter sent to finance ministers a week ago.

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She said vulnerable consumers were “at risk from some of the unscrupulous companies operating in the sector.”

Christopher Woolard, a former senior regulator at the Financial Conduct Authority, warned in 2019 that BNPL lending was exposing “millions of consumers greater risk of financial hardship.”

A spokesperson for John Lewis said: “We are very transparent about our prices, our annual interest rate is 16.9% and the payments and total payable are always clearly displayed.”

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