VAT rise fails to halt John Lewis march

John Lewis yesterday reported a 4.1 per cent lift in department store sales during its first full week of trading with VAT at its higher rate of 20 per cent.

The haul of 55.8m for the week to last Saturday represented a slowdown on the 38.7 per cent hike seen the previous week, when the chain benefited from an additional bank holiday and a surge in business prior to the VAT hike.

John Lewis described the latest week of its clearance period as positive but admitted it was helped by comparisons with the snow disruption experienced a year earlier. Excluding VAT, sales were 1.9 per cent higher in the week.

Freddie George, a retail analyst at Seymour Pierce stockbrokers, said the latest figures from John Lewis were broadly in line with expectations.

He added: "As yet, there has been no sign of any slowdown in sales as a consequence of the VAT rises, or the impact of higher prices on consumer's spending habits."

John Lewis said fashion and home sales did well, up 5.5 per cent and 4.9 per cent respectively.