John Lewis gets further boost from pre-VAT rush

Every John Lewis store reported a rise in sales
Sales up nearly 40% year on year
Interactive: Retail winners and losers

John Lewis has reported a surge in sales last week as customers flocked to buy big-ticket items ahead of the VAT rise.

Following a strong performance in December, the high street chain continued to perform well in the first week of 2011. Turnover at John Lewis department stores rose by 38.7% between Sunday 2 January and Saturday 8 January on the same period last year - the company's strongest year-on-year performance of the financial year. Every store reported a rise in sales, with High Wycombe up by 73.3%.

Maggie Porteous, head of selling operations, said John Lewis's stores had been particularly busy at the start of the week, before VAT was hiked to 20% on 4 January.

"Although we traded the same number of days as last year we benefited from an additional bank holiday [Monday 3 January]," said Porteous. "That, coupled with the imminent rise in VAT, drove footfall on Sunday and Monday, with the latter day seeing a phenomenal increase of 68%".

The figures also looked particularly strong because Britain had been struck by severe snow in the first week of 2010, while the more recent snow disruption had largely ended by the start of 2011.

Analysts said the strong data suggested that consumers had been particularly keen to take advantage of bargains in the January sales, as the government's austerity measures bites.

"Consumers in general face serious headwinds and uncertainties so see the sales as a time to make purchases that they could increasingly struggle to make in 2011," said Howard Archer of IHS Global Insight.

"Households face high unemployment, n! egative real earnings growth and elevated debt levels. On top of this, the weakness of the housing market is likely to have a dampening impact on consumer spending" Archer added.

John Lewis had already established itself as one of the winners of the Christmas period after posting a 7.6% rise in sales.

December's poor weather was bad news for several other retailers, though. This morning Flying Brands, the home shopping group, issued a profit warning saying the snow had hurt its sales badly.

"Our products, being mainly perishable goods and particularly our highly seasonal Christmas flowers, suffered more than other products from delays in delivery, with the result that our level of refunds and replacements was six times higher than the levels of previous years and for which we had budgeted," said the company, whose shares fell 12.5% this morning.

Fashion chain Ted Baker also said its sales had been hit by the snowy weather. However the company still expects to hit profit forecasts for this financial year, as turnover has been strong since Christmas. Group sales between 14 November and 8 January rose by 7.6%.


guardian.co.uk Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds


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