Tramworks send flagship store's sales off the rails

While the department store has reported relatively stable sales nationwide, performance at its St James Centre branch – formerly the best-performing John Lewis store in the country – has proved difficult.

The branch has now failed to record an increase on sales compared with the same week in 2008 for nearly four months.

Retail experts said the figures show even brands like John Lewis are not immune from the effects of the recession, suggesting the chain – regarded as a barometer of the whole retail sector – should focus more on mid-market lines rather than high-end goods to boost sales.

They also warned the ongoing disruption caused by the Edinburgh trams project could ultimately change shopping patterns in the capital, with consumers opting to take their business to Glasgow or Perth in the long term.

The latest figures from the John Lewis Partnership for the week ending 22 August show a decline in sales of 11.2 per cent, with similar double-digit falls for the two weeks beforehand. It last recorded a minimal increase of 0.3 per cent during the week ending May 9.

No-one from John Lewis was available to comment on the trend of falling sales at Edinburgh, but Hazel Tierney, the branch's general manager, said: "With many people enjoying the last week of the festival, trading was slightly slower, although our back-to-school merchandise performed well ahead of the schools returning."

Dr Paul Freathy from Stirling University suggested customers may be less willing to spend so much, and said the "mess" of Princes Street was a factor.

"Instead of customers spending 100 in a transaction, the figure may have fallen to around 50," he said. "These kind of department stores still need to provide value.

"If I was a customer worried about losing my job, would I go out to John Lewis and spend 2,000 on new furniture? No, I'd be more likely to hold on to my existing furniture."

Dr Freathy, professor of retail management at the university's Institute of Retail Studies, suggested stores such as John Lewis have to look at ways of attracting customers keen to reduce their spend in the current economic climate.

"Is it worth stocking a whole range of suits at 500? Instead, it should keep a small stock of such lines, but go mid-market, and look at what's in demand," he suggested. "You can still have the expensive lines, but they're not the priority.

Dr Freathy added: "Princes Street is an absolute mess. As a customer, if you have the choice of going to Glasgow, Edinburgh or Perth, you have to ask why would you go to Edinburgh with all the access issues. I know middle-class customers who have taken that decision.

"The longer the disruption goes on, the more serious the danger is those shopping patterns become established."

Graham Bell, spokesman for the Edinburgh Chamber of Commerce, admitted the tramworks and other issues such decreased parking facilities in George Street were impacting on retailers but stressed that, once completed, the city's infrastructure would attract shoppers in their droves.

He said: "The store in Edinburgh was the flagship of the whole brand, but it's not surprising with a local issue like the tramworks, it's slipped back."

A spokesman for the Scottish Retail Consortium declined to comment on the performance of the capital's John Lewis store, but said of the tramworks disruption: "Investment in Edinburgh's infrastructure is a good thing, and retailers will benefit from greater access. But the ultimate gains are balanced by some harm from the ongoing works."

Nationwide, John Lewis sales are down 2 per cent on this time last year.