John Lewis reports sales down by 3.1%

Retailer John Lewis added to fears over consumer confidence yesterday as the high street bellwether revealed sales declined for a second week in a row.

The store chain, which has outperformed the retail sector in recent years, said sales excluding VAT were down 3.1 per cent for the week to last Saturday. This followed a 4.4 per cent drop in the previous seven days.

Analysts said the latest figures were significant because they were the first in several weeks not to have been distorted by the weather.

Howard Archer, chief UK economist at IHS Global Insight, said the decline reinforced suspicions that consumers would be less prepared, or less able, to spend in 2011.

He added: "Meanwhile, unemployment is high and likely to rise further, and other elements of the fiscal squeeze will increasingly bite as the year progresses, and debt levels are elevated.

"On top of this, the weakness of the housing market is not good news for consumer spending."

Including VAT, sales at John Lewis were down 0.9 per cent on a year earlier.

Fashion sales were up 1.4 per cent with home sales 0.3 per cent stronger and electricals and home technology down by 5.1 per cent.

John Lewis's online business grew sales by 18.4 per cent, and Matthew McEachran, an analyst at Singer Capital Markets, said that this suggested that the average store experienced a like-for-like sales decline of around 7.5 per cent.

Retail director Andrew Murphy said: "The year ahead promises to be even more testing, but we are budgeting for growth."

The John Lewis Partnership yesterday announced that finance heavyweights Baroness Hogg and David Anderson were joining the group as non-executive directors.

Lady Hogg is currently chairman of the Financial Reporting Council and senior independent director of BG Group, while David Anderson is a non-executive director of NFU Mutual, chairman of the think-tank Mutuo and head of the newly formed Reclaim Fund.