John Lewis sales beat spending fears

The employee-owned firm, traditionally seen as a bellwether of the UK retail sector but which has outperformed competitors for over a year, said sales at its 28 department stores and one "at home" store grew 15.5 per cent to 52.5m in the week to August 7.

"The first week of the half year, and a vibrant performance to get us under way as we generated sales 15.5 per cent ahead of last year's mark. Branch teams reported significant footfall, particularly on Saturday," said Chris Hooper, John Lewis' head of operational support.

The department store outcome followed rises of 5.3 per cent and 8.2 per cent in the previous two weeks respectively, but concerns about future growth in the retail sector persist.

"In light of forthcoming VAT increases, concerns about public spending cuts and worries about the housing market, we believe spending is likely to be subdued over the next quarter," said Seymour Pierce analyst Freddie George.

John Lewis also owns the 231-store Waitrose supermarket chain, where week to August 7 sales rose 10.3 per cent to 89.6m, underlining its status as one of the UK's fastest growing grocers.

"There is no doubt, we believe, the company, as is M&S, is benefiting from householders staying at home during the holiday season and eating out less after the World Cup," said Mr George.