Apr 25, 2010
John Lewis adds to signs of UK consumer health
Apr 25, 2010
LONDON, April 23 (Reuters) - British department stores retailer John Lewis [JLP.UL] posted a 19 percent rise in weekly sales as shoppers showed no signs of easing back on spending despite fears of tax rises after next month's national election.
John Lewis in Reading, Berkshire
The firm, which is seen as a bellwether of the UK retail sector but has been outperforming rivals over the last six months, said sales at its 28 department stores and one "at home" store were 51.3 million pounds ($79.4 million) in the week to April 17, up from 43.2 million in the same week last year.
The outcome was boosted by an extra day's trading given the fall of Easter Sunday last year.
Nevertheless, the performance represented a 13 percent rise against the comparable post-Easter week last year.
"As we near the end of the first quarter we can look back with plenty of satisfaction at a very strong start to 2010," said the firm.
Fashion sales jumped 27.5 percent and homewares sales increased 24.7 percent, but sales in the electricals and home technology category were only up 0.3 percent.
British retailers are showing growing confidence about an economic recovery.
"The underlying impression we get is that consumer spending has firmed modestly overall in recent months," said Howard Archer, chief economist at IHS Global Insight.
But he believes the upside for consumer spending will be limited as consumers still face challenging conditions, notably high unemployment, low earnings growth and elevated debt levels.
"Consumers will also be wary that further out they are very likely to face higher taxes as part of the further major corrective action that will be needed to rein in the government finances, whatever the outcome of the general election," added Archer.
John Lewis also owns the 228-Waitrose supermarket chain.
Here, week to April 17 sales increased 26.9 percent to 92.2 million pounds, underlining the firm's current position as one of the UK's fastest growing grocers.
The outcome was boosted by the extra day's trade and strong sales of barbecue foods and picnic items, driven by fine weather.
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