Morning:
8°c
John Lewis sales falls signal tough Christmas
Hugo Duncan28 Nov 2008
John Lewis today reported another fall in sales as the High Street braced itself for its toughest Christmas in several years.
The firm - a bellwether for retailers and also for the British economy - said that sales slumped by 13.3% last week with Peter Jones in Sloane Square one of the worst performing of its 27 department stores, down more than a fifth.
It came as figures showed that consumer confidence is now languishing near record lows as Britain plunges deeper into recession.
The shock interest rate cut from 4.5% to 3% this month did little to restore confidence and the Bank of England is today under pressure to act decisively again next week.
"UK consumers are still being battered by news about our poor economy in general and mounting concerns about job losses in particular," said Rachel Joy at survey author GfK NOP.
"The dramatic cut in interest rates this month appears to have done little to improve sentiment so far, as UK consumers continue to fret over the impact of a looming recession. Consumers are treading water and waiting for the economy to stabilise after what has been a turbulent few months."
John Lewis said sales at its department stores totalled £68.4 million last week, down from £78.8 million in the same week last year.
Sales were down a massive 21.4% at Peter Jones - only Nottingham was worse with a 23% slump - as shoppers in the bonus belt stopped spending cash amid job losses across the City. Sales on Oxford Street were down 8.2%.
John Lewis managing director Andy Street said that heavy discounting and one-off sales at the likes of Marks & Spencer and Debenhams showed "most retailers were finding themselves in tough times".
He said the stores were ready to pass on a cut in VAT from 17.5% to 15% announced in the Pre-Budget Report. But in a dig at the Government, he said the move "has created an enormous amount of work at an already challenging time of year".
Overall, sales at the John Lewis Partnership, which also owns Waitrose, fell 8.6% last week to £145.5 million with the supermarket off 3.9% at £77.1 million. Sales across the Partnership for the year so far were down 1.4%.
Meanwhile, the GfK NOP consumer confidence index rose from minus 36 in October to minus 35 this month.
Howard Archer, chief UK economist at Global Insight, said: "Despite the VAT reduction and sharp cutting of interest rates, we suspect that retailers still face a very difficult Christmas period, and life looks to be extremely tough through much, if not all, of 2009.
"We suspect that there will be a lot more discounting, special promotions and flash sales right up to Christmas to try and get hard-pressed consumers to spend. It is also likely that there will be some extremely attractive bargains in the New Year sales."
Reader views (6)
Using John Lewis as an indicator is sheer stupidity. Logic would tell you that people are ditching John Lewis & taking up shops like Argos & Woolworths(if the doors are kept open for christmas)
- Anon, London, 01/12/2008 14:03
Report abuse
dear/sir/madam these shops have made plentry over the passed chistmases how it is tim to loose some like the big bisses not gettig boues in about january and the people who shop at white rore want kocking up for what they charge for there stuff they are just big conners i would go to asda tessco or saisbury or morrision i would not pay these rio off prices klikw12 mince pies for ten pounds if that is not a rip off what is yours sincerky grahan=m john gomersall freeman
- Graham John Gomersall Freeman, hull yorkshire, 30/11/2008 10:51
Report abuse
It is NOT about tinkering with vat etc...people will withhold their purchasing power in protest at government mismanagment-the japanese did for 10 years...so as long as brown and co carry on messing up no one will spend.Everyone i know is just spending on basic xmas food and at most 1 cheap gift each for the children.Many many retailers will go bust in the new year and government tax takings will be subterranean...until we get an election.
- A Moreno, luxembourg, 30/11/2008 08:37
Report abuse
Micheal, London
I have a feeling your story is a fib.
- David, london, 28/11/2008 22:53
Report abuse
I shopped at Morrison's today and found that although they are advertising "Price Drop/Change" every thing had increased in price. They have all the signs hanging about giving you the inference of 'fair play' forget it! 3 months ago streaky bacon £1.39 - now £1.77. two weeks ago Humous 85p now 96p. I await the big annoucement that they will be reducing prices by large amounts!! ie. bringing them back to what they were!!
- Timbo, London, 28/11/2008 21:22
Report abuse
I think the picture is rather more complicated than the figures suggest. Firstly I get the impression that people are cutting back on Christmas tat - the stuff that like the excess food becomes landfill by twelfth night. Secondly the media hype seems to have caused many people to change shopping habits. An elderly couple I know have an inflation linked civil service pension that gives them a higher disposable income than the majority of families. They go on holiday five or six time per year, eat out two or three times per week, she has her her done a minimum of once a week and they always have new cars. For years they shopped at Waitrose for years and now dispite being within walking distance go shopping by car, past Tesco, and onto Lidl!
- Michael, London, 28/11/2008 14:05
Report abuse
