John Lewis and Partners is dipping a toe into the water industry by applying to become its own supplier at some of its stores.
The retailer plans to take charge of supplying water to its John Lewis and Waitrose stores in England through a self-supply licence.
If the application is successful, John Lewis will become the first retailer to skip the margin charged by water suppliers and pay direct wholesale prices instead.
It plans to work with Waterscan to organise the operation, which could help the retailer reduce its overall water use and meet its sustainability goals.
An increasing number of companies are opting to self-supply rather than buy water from traditional companies after the regulator, Ofwat, opened the market to competition in 2017.
The biggest shake-up of the industry since deregulation in the late 1980s has prompted Greene King, Whitbread, Marston’s, Kellogg’s, Coca-Cola European Partners, BT and Heineken to become their own water suppliers.
In the past, companies were bound to a string of regional monopoly water suppliers to meet the demand of sites across the country. For big companies, this would mean a series of water bills from multiple suppliers every quarter.
Under the most recent laws, which took effect in April 2017, companies could choose a pan-national supplier or become a self-supplier.
Ofwat has said companies that choose to self-supply benefit from cost savings, better control of data and water efficiency savings.
The regulator has considered also opening the water market for households, but the financial savings are likely to be too small to make the cost of changing the sector worthwhile.
Neil Pendle, the managing director of Waterscan, said he was “extremely confident” a self-supply licence would help John Lewis meet its sustainability targets and set a benchmark for water efficiency in the retail sector.
