JOHN Lewis, Britain’s biggest department store group, said UK consumers were slowly becoming less fearful about their financial prospects, adding to optimism a spate of relatively upbeat economic news can be sustained.
Recent forecast-beating GDP data, manufacturing, construction and services sector surveys have eased pressure on the government to water down its austerity programme.
“The economy has settled in a place which is just not nearly as good as it used to be,” Andrew Murphy, retail director at the employee-owned chain, told Reuters yesterday.
“But people now don’t feel scared by that, whereas three years ago they were genuinely scared about what this new reality meant.”
John Lewis has traditionally been seen as a bellwether retailer but has been outperforming the wider market for about three years.
Though an industry survey last week showed UK retail sales fell unexpectedly in April, hurt by an earlier Easter this year, the underlying trend appears to be improving.
Elsewhere a poll of 61 economists taken in the past week found Britain’s economy will fare slightly better than previously thought this year, reducing the chance of more asset purchases by the Bank of England.
Murphy reckons the slightly better consumer psyche will be reflected in increased spending on homewares and furniture.
“My sense is that home will strengthen a bit through this year, which is something we couldn’t have said for either of the last three years.”