Retailer reveals north-south sales gap is widening

A MARKED north-south divide has emerged in the latest trading figures from department store stalwart John Lewis, with the chain's Scottish stores stuck firmly in the slow lane.

• Graphic: Graeme Cunningham

Weekly sales data from the employee-owned group - seen as a barometer of British retailing - reveal sharp double-digit falls at stores in Glasgow, Newcastle, Sheffield and Cheadle, near Stockport.

At the group's other two Scottish branches, in Aberdeen and Edinburgh, there were single-digit declines in the week to last Saturday.

In contrast, a string of stores in the south of England, including Cambridge, Milton Keynes and John Lewis's flagship Oxford Street outlet in London, were firmly in positive territory.

The partnership is unique among its retail peers in publishing weekly sales bulletins and, as a result, the figures can throw up anomalies.

However, analysis of sales returns for the first five weeks of John Lewis's financial year - which help smooth out that weekly volatility - paint a similar picture of geographic divide.

On that measure, Glasgow's sales were down by 5.5 per cent year-on-year, Aberdeen was 4.8 per cent lower and Edinburgh scraped out a sales increase of less than 1 per cent. There were equally weak readings for Cheadle, Newcastle and Sheffield. Gains were registered at nearly every location in the south of England, with the biggest five-week rises recorded at Bluewater shopping centre, next to the M25, Cambridge, Oxford Street and Kingston, at 14.2 per cent, 11.7 per cent, 9 per cent and 7.6 per cent, respectively.

No-one from John Lewis, which runs 29 own-brand stores plus an outlet under the Peter Jones name, was available for comment.

Freddie George, a retail analyst at brokerage Seymour Pierce, said the main finding from yesterday's data was the "significant underperformance of the northern-based stores".

Overall takings from the John Lewis chain grew by 5.6 per cent to 57.1 million in the week to 4 September, down on the 10.7 per cent gain seen in the five-week period.

Howard Archer, chief UK economist at IHS Global Insight, the forecasting specialist, said: "Given that John Lewis department store sales are widely seen as a bellwether for the health of the consumer, the slowdown in sales fuels concern that consumers may be becoming more wary in their spending, and that this will weigh down on growth over the coming months."

"Confidence is weak compared to long-term norms, and the likelihood is that many consumers will find life difficult over the coming months and will be constrained in their spending."

In a sign that expenditure on "big-ticket" items may be cooling, John Lewis said sales of electricals and home technology were down 1.3 per cent year-on-year last week, compared with an increase of 2.5 per cent over the five weeks.

Evidence of a creeping north-south divide does not stop at middle Britain's favourite retailer.

Research this week suggested that the number of shops closing across the UK was slowing post-recession, but the north was faring significantly worse than the south.

According to the Local Data Company, towns and cities in the south of England were coping far better, with Bristol having just half the vacancy rate of Blackpool, the worst affected large centre with almost 30 per cent of shops closed.

Seymour Pierce's George said he believed the newsflow from the retail sector would be "positive" over the coming week - with strong first-half results due from Next and B&Q-owner Kingfisher. Both companies, though, are likely to provide cautionary outlooks. John Lewis is due to report its first-half results on Thursday.