Healthy John Lewis slips 
as Olympic Games begin

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John Lewis, the UK’s biggest department store group, said an impressive half year ended with a softer performance in the final week.

The group said demand was sapped last week by the spell of hot weather and the opening of the London 2012 Games.

The employee-owned firm said department store sales increased by 6.2 per cent year on year to £56.6m in the week to July 28.

In the previous two weeks the group posted rises of 11.2 per cent and 17.3 per cent.

The Sheffield store reported a nine per cent decline last week, but its sales rose a modest 0.1 per cent during the first half.

John Lewis said first-half sales have been “hugely encouraging” with an increase of 12.9 per cent.

Managing director Andy Street said an 86 per cent week on week uplift in sales of London 2012 merchandise “augurs well for an exciting week ahead”.

“We substantially outperformed a slow market. While we have added a number of new shops, growth from the established business has been strong,” he said.

Mr Street highlighted the performance from the website, which delivered a 43.5 per cent rise in sales in the half year.

He added that the group has entered the second half “with confidence provided by strong momentum.”

Although inflation and unemployment are falling, the UK is still in recession and many retailers are feeling the pain as consumers grapple with meagre wage growth and Government austerity measures.

John Lewis has set the pace in the retail sector this summer as the deluge of rain has driven footfall from the high street to the covered shopping centres where its stores are often located.

Wet and cold weather is also favourable for its key household goods business.

The retailer has also been outperforming the wider market because its generally more affluent customers have been less impacted by the economic downturn, while improvements to product and service and new modern stores have been welcomed by consumers.

Economist Howard Archer at IHS Global Insight said: “John Lewis saw year-on-year sales growth slow appreciably in the week to 28 July.

“While John Lewis indicated that some better weather and the opening of the Olympic Games had impacted on sales, the slowdown nevertheless fuels concern over the strength of consumer spending especially as it follows on from a stream of recent grim news on the economy.”

John Lewis also owns upmarket supermarket chain Waitrose, which has stores in Harrogate, Sheffield, York, Leeds and Otley.

The group said Waitrose’s sales in the week to July 28 rose 13.6 per cent to £113.7m, boosted by the sunshine and a celebratory atmosphere across the country.