John Lewis raises sales forecast
John Lewis, Britain’s biggest department store group, has raised its sales guidance after outperforming a flat retail market in its first quarter and believes the economy is on course for a slow recovery, despite a recent dip back into recession.
“My gut feel is a long, slow, steady recovery that at certain points will look like a non-recovery and at other points might feel, like it has for us in the last few months, OK,” Andrew Murphy, retail director at the employee-owned chain said.
“But I suspect in five years time we’ll look back and we’ll see a very gentle gradient upwards.”
Many British retailers are struggling as shoppers grapple with higher prices, muted wage growth and government austerity measures, and preliminary data last month showed the economy tipping back into recession.
A survey last week also showed British retail sales posted their biggest fall in more than a year in April, while cards and gifts chain Clinton Cards entered administration, a form of protection from creditors.
John Lewis which trades from 29 department stores across the UK, eight smaller ‘at home’ stores, and an online business, has long outperformed the wider market as its generally more affluent customers have been less impacted by the downturn.
In its first quarter to 28 April, the group posted sales growth of 12.2 per cent, which Murphy said equated to like-for-like growth of about seven per cent and strongly outperformed a flattish overall market.
“We have revised our expectation upwards but candidly we haven’t revised our expectation of the market,” he said.