Sep 25, 2009
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John Lewis department store sales jump

Sep 25, 2009

LONDON (Reuters) - John Lewis, the employee-owned group seen as a barometer of UK retailing, posted a 6.6 percent rise in weekly department store sales, helped by a weak figure the same time last year and demand for its new "Value" range.

The group, which also runs the upmarket Waitrose grocery chain, said on Friday 25 September sales at its 27 department stores totalled 50.5 million pounds in the week ended September 19.

Waitrose continued its recent strong performance, with sales up 13.2 percent to 82.3 million pounds.

"Our customers' response to our new Value range has exceeded our expectations," John Lewis said of a new lower-price series of products at its department stores.

The performance was also flattered by a weak comparative figure for the same time last year, when uncertainty caused by the collapse of U.S. investment bank Lehman Brothers contributed to a 5.6 percent drop in department store sales.

Consumer spending has held up better than many analysts had expected in the recession and Britain's retailers can look forward to a significantly easier set of comparable trading figures over the coming weeks.

However, a procession of industry leaders from John Lewis Chairman Charlie Mayfield to Next (NXT.L) chief executive Simon Wolfson have warned in recent days that trading is likely to remain tough in 2010 as unemployment continues to rise and taxes climb to pay for bank bailouts.

Global Insight economist Howard Archer said the John Lewis figures were encouraging after a flat month-on-month outcome for official UK retail sales figures in August.

But he remained cautious.

"The fact is that consumers continue to face serious obstacles that are likely to limit the upside for spending for some time to come," he said.

John Lewis said weekly fashion sales jumped 10.6 percent, while electricals and home technology sales were up 6.2 percent and homewares up 3 percent. Online sales rocketed 46.9 percent.

Marks & Spencer (MKS.L), Britain's biggest clothing retailer and a competitor with Waitrose in upmarket foods, publishes quarterly sales figures on Wednesday 23 September.

On Thursday 24 September, Waitrose announced plans for up to 300 convenience stores that will step up the challenge to M&S's Simply Food outlets.

(Reporting by Mark Potter)

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