May sales dip warning from John Lewis

Retail bellwether John Lewis has revealed a fall in sales in the first week of May, sparking fears of more tough times ahead for the high street.

The department store chain said sales excluding VAT were down 3 per cent, year-on-year, as "normality" returned after a spending spree brought about by the hot weather and extended period of bank holidays over Easter and the royal wedding. Total sales including VAT were 1.4 per cent lower.

Only three of the 29 John Lewis branches operating a year ago saw growth in sales as shoppers reduced their purchases of electrical and homewares items. Aberdeen was one of the three outlets in positive territory, with its takings up by 1.6 per cent. In contrast, Edinburgh sales fell 3.2 per cent, while Glasgow was 2.8 per cent lower.

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The slowdown at John Lewis suggests that April's surge in high street sales is unlikely to be repeated in May as cash-strapped consumers return to their previous cautious habits.

The British Retail Consortium reported that retail sales rose by 6.9 per cent in April in its best performance for five years after the sharpest decline on record in March.

Howard Archer, chief economist at IHS Global Insight, said: "What April's spike suggests is that pressurised consumers need a particularly favourable set of circumstances to part with their cash.

"And now that April's special circumstances have disappeared, we suspect consumers are likely to re-tighten heir purse strings over the coming months."

Sales in John Lewis' homeware department were down 5.6 per cent including VAT as consumers reined in spending on indoor furnishings. However, sales of thinner duvets, outdoor items and picnicware were boosted by the warmer weather.

Its electricals and home technology department saw a 3.3 per cent decline in sales in a "difficult week" in which it began to hit tougher comparatives with the previous year. But fashion sales were up 4.9 per cent as "the Pippa Middleton effect" saw consumers snapping up long flowing dresses.