High street worries grow as sales slump at John Lewis

Retailing hit as consumer slowdown gathers pace

The John Lewis department store chain shed further light on the deepening consumer slowdown yesterday, when it posted dire weekly sales.

The company said that sales tumbled by 7.6 per cent to £48.2m for the week to 18 October, as it became the latest retailer this week to send a distress signal from the high street.

Its sales put down an ominous marker for what is expected to be one of the worst Christmas trading periods for about 30 years and came on the same day that official figures confirmed that the UK was hurtling towards a recession. UK gross domestic product fell by 0.5 per cent in the three months to the end of September – the first quarter of negative growth in 16 years.

Only John Lewis's Aberdeen store, which was up 7.3 per cent, was in positive territory among stores open for more than a year. All its other department stores posted tumbling, sales with Peterborough down 25 per cent, High Wycombe 22 per cent and Southampton 20 per cent, although its northern branches performed better. The school half-term in many areas of the country fell in different weeks from last year which made a direct annual comparisons difficult, said Dan Knowles, John Lewis's director of selling operations.

He said: "The economic climate and consequent customer caution in spending led to a disappointing week." Mr Knowles added that sales of home assortment products "found the going tough, as has been the trend so far this year". However, Mr Knowles said that sales of womenswear, particularly shoes, had been robust and men's accessories held up.

Howard Archer, the chief UK and European economist at Global Insight, said: "There is no getting away from the fact that this is a very disappointing and worrying performance that bodes ill for the retail sector in general. The financial crisis and heightened fears over the economy and jobs are clearly heightening the already serious pressures weighing down on consumers."

Tarlok Teji, a partner in Deloitte UK's retail practice, said uncertainty over the economy was having the biggest impact on consumers' desire to spend. He said: "There is so much uncertainty which has been created by the financial sector turmoil that consumers just need confidence and I think another big cut in interest rates will go some way to helping the consumer."

On Thursday, DSGi, which owns the Currys and PC World retail chains, posted total underlying sales down 7 per cent. On the same day, Sports Direct, which is controlled by Mike Ashley, said it continued to battle the "hardest trading conditions in its history".

The administrator for the furnishing chain Rosebys, which hit the buffers last month, cut a further 144 jobs this week after more stores were closed. KPMG said it shut a further 24 of the group's outlets, bringing the total so far to 97. However, Howard Smith, a joint administrator at KPMG, said: "Discussions regarding a going concern sale are proceeding satisfactorily and the majority of outlets, 183, are still trading."

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