John Lewis head warns of 'national nervousness'

RETAILERS are bracing themselves for the ill effects of a "national nervousness" in 2011 as economic jitters and the VAT rise take their toll on shopping habits, according to the head of John Lewis in Edinburgh and Aberdeen.

Although the retail sector is expecting a "solid" performance this Christmas, Barry Matheson admitted concerns over the opening months of 2011 when sales are expected to be hit hard. He said the combination of public sector spending cuts and the VAT hike "are undoubtedly going to make any retailer cautious about what certainly the early part of the year is going to bring".

Matheson said sales north of the Border have been hit harder this year as Scotland and the north of England have been slower to emerge from the trough of the recession.

There are concerns about how the snow will impact high street sales in the run-up to Christmas but Matheson argued that the weather has so far only served to catapult internet sales.

"Dotcom sales in our catchment areas are running at 60 per cent up on last year, which is quite exceptional," Matheson said. John Lewis expects this year's bestsellers to include iPads, iPods and, unusually, cashmere jumpers.

UK retail figures out on Tuesday are expected to reveal that the positive sales trend of recent months continued in November and that a "solid" Christmas for the high street is in prospect.

John Stevenson, a broker at KBC Peel Hunt, said: "Retailers are better prepared for Christmas this year, certainly compared with two years ago when they were caught out in the recession.

"There may not be a lot of consumer money knocking around, but we are far from a high street disaster scenario as people have been living with the austerity cloud for some time. Retailers are also in a much better stock position."