John Lewis sales fall as shoppers feel pinch

 
City A.M. Reporter
Department store John Lewis suffered a decline in sales last week, a sign that an increase in VAT sales tax has further weakened already fragile UK consumer spending.

The retailer, which also owns supermarket chain Waitrose, said its department store sales fell 2.2 per cent to £50.1m in the week to January 22.

Sales in the previous two weeks had increased 4.1 per cent and 38.7 per cent respectively.

"It was a quieter week for John Lewis but the comparisons against last year are difficult to read due to periods of heavy snowfall in the first week of January last year and the resulting uplift in trade over the following two weeks," it said in a statement.

It said taking the week ending January 15 and the week ending January 22 together provides a more realistic comparison with last year, and this gave an overall increase of one per cent.

The John Lewis data, published as a survey, said British consumer confidence tumbled to its lowest in almost two years in January.

"The slowdown in John Lewis sales is particularly notable as the company has been clearly out-performing the retail sector as a whole," said IHS Global Insight economist Howard Archer.

"The John Lewis figures suggest that consumers are becoming increasingly less prepared, or less able, to spend as higher inflation and muted earnings growth squeezes their purchasing power."