U.S. shoppers are on track to order $177.9 billion of goods online and collect them in a store this year, up 15.3% on 2025, according to Capital One Shopping Research.[1] Every one of those orders has to land somewhere in a retail lease’s definition of gross sales. Most of those definitions were written before the transaction had a name.
Percentage rent is owed on whatever the lease’s gross sales definition covers. Whether an online order counts is not settled by where the goods physically shipped from, or by whether the tenant books the revenue as e-commerce. It is settled by the words in the definition, and courts read those words to reach transactions nobody imagined when the lease was signed.
Brent Cross’s landlords went to the High Court in December 2025 over a lease from 1979. Hammerson plc and Standard Life Investments, now part of Aberdeen, are claimants; John Lewis is the defendant. Under that lease the store pays a base rent of £30,000 a year, plus 0.75% of gross receipts on turnover between £4m and £10m and 1% above £10m.[2] Business Matters put the store’s annual takings at roughly £50m.[2] At that level of sales those percentages produce a little over £400,000 of turnover rent a year, against a £30,000 base rent.
The contested words were drafted for mail order. The definition captures “mail, telephone or similar orders received or filled at or from” the premises, and orders that “originated and/or are accepted at or from the demised premises” regardless of where the goods end up.[2] The landlords say a click-and-collect order is filled at the store, so it counts. John Lewis says the sale completes when the goods leave its distribution network, and the shop is only a collection point.[3]
The claim asks for thirteen years of sales data before it asks for money. The landlords want an order requiring John Lewis to produce a detailed breakdown of sales for every year since 2013, with backdated rent, interest and costs to follow if the numbers show click-and-collect was left out.[2] No trial date has been set. That sequencing is the expensive part for any retail tenant: the reporting obligation and the audit right come first, and the arrears are computed from what they turn up.
English courts have already held that old turnover rent language absorbs things that did not exist when it was written. In Debenhams Retail plc v Sun Alliance and London Assurance Co Ltd, the Court of Appeal considered a Swindon department store lease dated 19 April 1971, for a term of 99 years less 10 days running from 1 October 1965, with rent set as a fixed sum plus a proportion of turnover. VAT did not exist at that date; it replaced purchase tax in 1973. The court held in July 2005 that VAT is part of the gross amount of total sales and so counts toward the turnover rent, because the lease had to be construed to accommodate the changed circumstances.[4] The same reasoning is what the Brent Cross landlords are relying on.
A U.S. bankruptcy court read a broad gross sales clause just as literally. In In re Southeastern Grocers, LLC, the Delaware Bankruptcy Court decided on 6 September 2018 how to compute percentage rent cure amounts under the debtor’s retail leases. The leases defined gross sales to include “sales of all merchandise, including sales by any concessionaire or licensee in the premises.” The debtors argued that lottery tickets, gift cards, phone cards and ATM transactions should not count, because most of the money went straight to third parties. The court rejected that and held the full gross amount counted, on the plain language.[5]
The practical exposure is not really the lawsuit, it is the reporting. The Lamy Group, which audits tenant sales reports for landlords, said after running hundreds of audits in 2020 that close to two thirds of retailers misreported sales, and that about three quarters of the misreporting involved internet transactions: orders placed online and picked up in store, orders placed in store and shipped to the customer, and online purchases returned to a store that had nothing to do with the original sale.[6] Retailers were also deducting credit card and delivery fees from reportable sales. Most of that is not concealment. It is a finance team applying a channel definition that does not match the lease definition, month after month, until somebody audits it.
Percentage rent is also the reason a landlord cares whether a store stays open at all, which is the subject of the continuous operation clause and the economics of going dark. A tenant that shifts fulfillment out of the store without shifting the lease definition with it produces the same result as going dark, from the landlord’s side of the ledger: the sales still happen, the rent stops tracking them.
Finding the definition before the auditor does#
Acrebase extracts the gross sales definition from every retail lease in a portfolio and lines the definitions up side by side: what is included, what is excluded, how online and pickup orders are treated, and what reporting and audit rights sit alongside them. For a retailer with two hundred stores signed across four decades, that is the difference between knowing which leases capture click-and-collect and discovering it during disclosure. When a new lease is being drafted, the clause library and negotiation playbook hold the version your counsel approved, so the exclusion you won in one negotiation does not quietly disappear from the next one.
If you are a tenant, read your gross sales definition against how your business actually fulfills orders today, not how it did when the lease was signed, and reconcile what your point-of-sale system reports to the landlord with what the definition asks for. Where you want online revenue out, exclude it by name and by fulfillment method. If you are a landlord, a definition that reaches orders “received or filled at or from the premises” is doing real work, but it is work you will have to litigate; naming click-and-collect, ship-from-store, curbside and in-store returns explicitly costs one sentence at drafting and saves the thirteen-year lookback.
Footnotes
[1] Capital One Shopping Research, “Buy Online Pick Up In Store Statistics (2026)” — U.S. click-and-collect retail sales estimated at $154.3 billion in 2025 and projected at $177.9 billion in 2026, a 15.3% year-over-year increase. https://capitaloneshopping.com/research/buy-online-pick-up-in-store-statistics/
[2] Business Matters, “John Lewis dragged into High Court over click-and-collect rent at Brent Cross” — claim filed in the High Court in December 2025 by Hammerson plc and Standard Life (now Aberdeen); 1979 lease with £30,000 base rent, 0.75% of gross receipts on turnover between £4m and £10m and 1% above £10m; annual store takings estimated at around £50m; lease wording covering “mail, telephone or similar orders received or filled at or from” the premises and orders that “originated and/or are accepted at or from the demised premises”; relief sought includes production of annual sales breakdowns from 2013 onward followed by backdated rent, interest and costs; no trial date listed. https://bmmagazine.co.uk/news/john-lewis-brent-cross-click-and-collect-rent-dispute/
[3] City A.M., “John Lewis hit with click-and-collect lawsuit” — John Lewis’s position that the transaction is completed when the order leaves the distribution centre, and Hammerson’s request that the High Court clarify whether click-and-collect sales belong in the turnover calculation. https://www.cityam.com/john-lewis-hit-with-click-and-collect-lawsuit/
[4] Debenhams Retail plc and another v Sun Alliance and London Assurance Company Ltd [2005] EWCA Civ 868 (Court of Appeal, Civil Division, 20 July 2005) — Swindon department store lease dated 19 April 1971 for 99 years less 10 days from 1 October 1965, rent comprising a fixed annual sum plus a proportion of turnover; Court of Appeal allowed the appeal and declared that VAT, which replaced purchase tax after the 1965 construction date, forms part of the gross amount of total sales and is included in turnover for the purposes of the turnover rent. https://www.bailii.org/ew/cases/EWCA/Civ/2005/868.html
[5] In re Southeastern Grocers, LLC, Case No. 18-10700 (Bankr. D. Del. Sept. 6, 2018), discussed in Gordon Feinblatt LLC, “Lease Definition of ‘Gross Sales’ Includes Revenue from Ancillary Services” — leases defined gross sales to include “sales of all merchandise, including sales by any concessionaire or licensee in the premises”; court held the percentage rent cure amount was computed on the full gross receipts from lottery tickets, gift and phone cards and ATM transactions, rejecting the debtors’ argument that only the net retained after third-party commissions should count. https://www.gfrlaw.com/what-we-do/insights/lease-definition-%E2%80%9Cgross-sales%E2%80%9D-includes-revenue-ancillary-services
[6] The Lamy Group, “Auditing Shows That Two-Thirds of Retailers Misreport Sales to Landlords” (26 February 2021) — based on hundreds of tenant sales audits completed in 2020; roughly three quarters of misreporting involved internet sales, including buy-online-pick-up-in-store and ship-from-store orders and online purchases returned to an uninvolved store, along with improper deduction of credit card and delivery fees from reportable sales. https://www.prweb.com/releases/auditing_shows_that_two_thirds_of_retailers_misreport_sales_to_landlords_reveals_the_lamy_group/prweb17754260.htm
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