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John Lewis sales fuel hopes that UK retailers will see festive shot in arm

John Lewis has outperformed rivals this year. Picture: Getty

John Lewis has outperformed rivals this year. Picture: Getty

  • by DOMINIC JEFF
 

Department store chain John Lewis enjoyed one of its best weeks yet as the recent cold snap combined with the start of the Christmas shopping season to help it outperform the struggling high street.

The employee-owned business said sales in the week to Saturday were 9.3 per cent higher than the same week last year at £124.2 million.

It was the third best week the retailer has seen, boosting hopes that renewed consumer confidence will give the UK high street a much needed shot in the arm this month.

Howard Archer, chief UK and European economist at IHS Global Insight, said John Lewis’s sales growth maintains hopes that British retailers will have a reasonable – if far from spectacular – Christmas.

“It must be borne in mind that the partnership has been very much an outperformer in the retail sector for an extended period, and the reality is that its customers have typically been better placed to withstand the pressures on consumers,” he said.

However, he added that there is hope that an underlying improvement in consumers’ financial health over recent months will support spending through the vital Christmas period.

“Consumers have been benefiting in recent months from robust employment growth, a marked overall retreat in consumer price inflation and an edging up in earnings growth from the lows seen earlier in 2012,” Archer said.

Figures published today by accountancy firm BDO highlighted the difference between the outperforming partnership and the rest of the high street, where spending remained in the doldrums in November, with like-for-like sales having dipped by 0.2 per cent year-on-year.

However, Don Williams, head of retail and wholesale at BDO, said people “will not cancel Christmas”.

He said: “They are just following the trend of the Christmas period getting later every year thanks to extended opening hours and better online shopping services, and the atrocious weather has just given them another reason to delay their festive shopping. There is every indication this Christmas will be better than last year.”

John Lewis said the cold snap boosted not only sales of outerwear and knitwear but also gifts that enable people to use their ever-popular tech products while keeping warm. The group reported that “hearmuffs”, which protect ears from the cold while they listen to music, and “touch gloves”, which allow use of a touch screen without exposing hands to the elements, have been flying off the shelves.

Online sales soared to £37.9m last week, a record week for the johnlewis.com site. The group invested heavily in its website a year ago and has increased the coverage of its “click and collect” system with four new stores.

The website has grown sales by more than a third compared to last year, helping the group to post double-digit sales rises over the last 16 weeks. John Lewis is hoping to see another surge in trade today, dubbed “mega Monday” because people will rush to order items in time for Christmas delivery.

 

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