John Lewis sales under pressure
Published 04/02/2011 | 10:47
John Lewis revealed sales declined for a second week in a row today as the high street bellwether added to fears over consumer confidence.
The department store chain, which has outperformed the retail sector in recent years, said sales excluding VAT were down 3.1pc for the week to last Saturday. This followed a 4.4pc drop in the previous seven days.
Including VAT, sales were down 0.9pc on a year earlier with four of the company's 29 stores that have been open for more than a year increasing sales on a year ago - Cambridge, Trafford, Glasgow and Peter Jones in London.
Fashion sales were up 1.4pc with home sales 0.3pc stronger and electricals and home technology down by 5.1pc.
Analysts said the latest figures were significant because they were the first in several weeks not to have been distorted by the weather.
The online business grew sales by 18.4pc and Matthew McEachran, an analyst at Singer Capital Markets, said this suggested that the average store experienced a like-for-like sales decline of around 7.5pc.
Howard Archer, chief UK economist at IHS Global Insight, said the latest figures reinforced suspicions that consumers will be very cautious in their spending in 2011 in the face of serious headwinds.
"Higher inflation - fuelled by January's VAT hike to 20pc - and muted earnings growth is increasingly squeezing purchasing power," he added.
John Lewis said its sales for the week including VAT were 14.5pc higher than two years ago and that all but two of its shops increased trade on a year ago in the company's financial year to the end of January.
Retail director Andrew Murphy said: "The year ahead promises to be even more testing, but we are budgeting for growth."