John Lewis has announced plans to diversify into house building and has predicted that this will account for 40% of its future profits.
According to Jade Greenhow, director of operations at Insight Data, the decision should be seen as a ‘sign of things to come’ for the UK construction industry.
“Just like the fenestration industry where fabricators are starting to diversify into new materials and new products, we know that many businesses are looking to pivot into other industries as times become tougher in the UK,” she said.
“The reason why large businesses will start to do this? It’s simple, ‘meet current demand in order to secure future profit’. The Covid pandemic is changing the world as we know it. Retail and hospitality are being hit the hardest. Will we see big companies from those sectors start to pivot into infrastructure service providers? Will other large retailers decide that construction is where the money is at?
“This is an interesting development for the UK construction industry,” she continued. “We already know that the UK government’s commitment to large infrastructure projects will stimulate the construction sector throughout the next five to 10 years. With big retail and hospitality companies looking to get in on a piece of the pie, do existing construction companies have some new rivals to contend with or is there enough work for everyone?
“The answers to all these questions will shape the future of construction in this country. However, only time will tell what the impact of this diversification will be.”
