Lewis sees brighter summer on high street

Chairman Charlie Mayfield said he expects to see an improvement before the summer events.

“The level of demand is still pretty subdued right now,” he said. “I do think over the course of this year – as we start to see an easing of the macro-economic picture and businesses investing again – we will move from decline to growth, not fantastic growth but an improving trend.”

Talking about trading so far this year he said he was cautiously optimistic and believes John Lewis will see growth ahead of the market.

“We will see a trajectory change from decline to modest growth,” he added.

Sales have risen 7.7 per cent in the five weeks since the end of January.

Mr Mayfield was speaking after the 148-year-old employee-owned firm cut its annual staff bonus for the first time in three years after posting a 3.8 per cent fall in profits to £353.8m in the year to January 28, as even its affluent customer base has fallen prey to hard times.

John Lewis said its 81,000 staff will be paid a bonus of 14 per cent of salary, down from 18 per cent last year.

The fall in profits followed a 20.4 per cent decrease in department store operating profits to £158m as its ‘Never Knowingly Undersold’ price-matching policy meant more discounting in tough markets.

Operating profits at its Waitrose supermarket division fell 5.2 per cent to £261m. Waitrose’s brand-match campaign cost millions of pounds, but helped to protect sales.

Waitrose, which has stores in Harrogate, Otley, Sheffield, Willerby, Meanwood, York and Leeds, saw its market share increase by 0.2 per cent to 4.1 per cent in the period.

It reported a 7.9 per cent increase in sales excluding VAT to £5.1bn.

Waitrose managing director Mark Price hailed the success of celebrity endorsements from Delia Smith and Heston Blumenthal and pledged to continue working with the chefs in 2012.

A Waitrose spokesperson said: “We are delighted with the performance of our shops in Yorkshire and this financial year has been one of significant growth for Waitrose in the county.

“During the last 18 months, we have ensured that more customers than ever before are within reach of a Waitrose shop, opening stores in York and Leeds and we will continue to explore opportunities that will enable us to increase our presence further.”

Waitrose would not be drawn on specific targets, which it has previously said could include Wetherby and Ripon.

The department stores saw sales increase one per cent to £2.79bn.

James Prince, managing director of John Lewis Sheffield, said the store had seen strong sales of TVs thanks to the switch to digital and coffee makers as customers treated themselves to affordable luxuries. It also saw strong a “fantastic reaction” to the introduction of Spanish fashion chain Mango as customers were attracted by its quality clothing at affordable prices.

John Lewis is planning to open a new store in Leeds in 2015-16 and it is expected to make a final decision on whether it will be in the proposed Eastgate Quarter development soon. A John Lewis spokesperson said: “We remain in talks with Hammerson, the developer of the Eastgate Scheme, and the city council to bring our plans for Leeds to fruition.”

The council said yesterday that terms have been revised to secure John Lewis’s involvement.

The group also plans to open a department store at Monks Cross in York in 2013. The planning committee is due to hear the development proposals at the end of March and John Lewis said it awaits the outcome.”

“We are keen to build a presence in Yorkshire as it remains an important strategic location for us. Our focus remains on opening shops in Leeds and York,” said the spokesman.

Eastgate terms revised

A MAJOR retail development on Eastgate, Leeds came a step closer yesterday after councillors voted to revise terms with the developers.

The council approved changes to its agreement with Hammersons after a report from officers said the changes were necessary to secure the involvement of the development’s flagship store John Lewis.

Leeds City Council’s executive board member for development and economy, Coun Richard Lewis, said: “The Eastgate development is one of the most exciting projects in Leeds for a long time and we see John Lewis as central to the success of the scheme.”