Pace of growth slowing for sales at John Lewis

Retailer John Lewis said sales growth slowed last week, fuelling concerns consumers, worried by prospective tax rises and employment uncertainty, are becoming more wary in their spending.

The employee-owned firm is traditionally seen as a bellwether of the UK retail sector but it has outperformed competitors for over a year.

Yesterday it said sales at its 28 department stores and one "at home" store increased 5.3 per cent to 52.7m in the week to July 31.

Hide Ad
Hide Ad

The outcome followed rises of 8.2 per cent and 9.8 per cent in the previous two weeks respectively.

It took John Lewis' sales growth for the 26 weeks to July 31 to 14.9 per cent, with the retailer winning market share from rivals.

Managing director Andy Street said: "Looking ahead, our first-half year's form should give us great confidence for the all-important second half.

"But we should be realistic in our expectations as we come up against stronger figures from last year. I suspect we won't finish with another 15 per cent advance.

Hide Ad
Hide Ad

On Wednesday two of Britain's biggest retailers, fashion chain Next and floor coverings retailer Carpetright reported a cooling in consumer demand, raising fears that higher taxes and public spending cuts aimed at reining in record government borrowing could derail the economic recovery.

Howard Archer, chief economist IHS Global Insight, said the data suggested consumers were spending more cautiouly.

"The substantial fiscal squeeze will increasingly hit public sector jobs and consumers' pockets, while households already face high unemployment, muted earnings growth, elevated debt levels and high fuel prices."

John Lewis also owns the 231-store Waitrose supermarket chain, where in the week to July 31 sales rose 9.3 per cent to 90.4m.

Hide Ad
Hide Ad

Lisa Williams, managing director for John Lewis Sheffield, said: "We experienced mixed trading last week.

"A few local factors, such as sunny weather, city centre events and the refurbishment of our escalators has undoubtedly impacted our figures.

"However, the iPad's launch at John Lewis Sheffield has generated huge interest from our customers and womenswear has benefited from the addition of two new brands, Damsel in a Dress and Mint Velvet.

"We are trading against strong figures from last year so we are realistic in our expectations for the second half.

"I suspect we won't see the same year-on-year growth."

Related topics: