John Lewis fall in sales adds to concerns on consumer confidence

Bellwether group sees total sales slip in last week of May, although Waitrose bucks trend with 7.3% increase John Lewis has added to concerns that the UK economic recovery is weakening by reporting that turnover across its department stores fell during the last week of May. Total sales at John Lewis dropped by 0.8% in the week to Saturday 28 May compared with a year ago – or a 3% fall in sales excluding VAT (discounting the distortion produced by January’s rise in VAT to 20%). The figure also included contributions from three new stores which were not trading a year ago, suggesting a larger like-for-like decline at its established outlets. Sales fell by 10% at some stores, including the out-of-town sites at High Wycombe and Bluewater. John Lewis cited poor weather during the week, and also pointed out that a year ago it had seen strong demand for new televisions before the football World Cup. Economists, though, said the figures underlined the fragile state of consumer confidence. “Given that John Lewis is seen as a bellwether for the state of the retail sector – in fact, it has been a consistent outperformer in recent times – this suggests that consumers have generally become more circumspect in their spending again after splashing out a bit in April due to the later Easter, royal wedding and good weather,” said Howard Archer, chief UK economist at IHS Global Insight. Waitrose, the partnership’s grocery chain, performed well with weekly sales up by 7.3%. Lesley Ballantyne, director of operational development at John Lewis, said the sales performance was “credible”. “We had a very good week of weather against us last year and this year there was rain and even hail in parts of the UK,” Ballantyne said. Separately, the latest data from the services sector released on Friday showed that household consumption was still weak. John Lewis Retail industry Consumer spending Economics Graeme Wearden guardian.co.uk

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