John Lewis cheer fails to lift retailers' Christmas gloom

The John Lewis Partnership, the privately held department store group which also owns the Waitrose supermarket chain, yesterday provided a beacon of hope for the retail sector as it said its Christmas sales were showing double-digit growth.

The John Lewis Partnership, the privately held department store group which also owns the Waitrose supermarket chain, yesterday provided a beacon of hope for the retail sector as it said its Christmas sales were showing double-digit growth.

But analysts warned the festive cheer was unlikely to be shared across the sector with Marks & Spencer, the embattled food and clothing retailer, expected to be among the hardest hit.

John Lewis, which is the first major retailer to release a trading statement for the crucial December period, said that by the close of business today it expected total sales in the preceding four weeks to be up 18 per cent on the previous year. It said like-for-like sales, excluding the group's new stores at Bluewater in Kent and Glasgow, would be up around 10 per cent.

Brian O'Callaghan, John Lewis's outgoing trading director, said: "Sales have benefited from what we judge to be a stay-at-home Britain with a strong emphasis on preparing the home for entertainment and celebration."

Mr O'Callaghan is due to relinquish his post on 31 January and will be replaced by Luke Mayhew, currently director of research and expansion.

Mr O'Callaghan said furnishing and home-dining-ware sales at the group's 25 department stores had been buoyant in the period. Christmas gift sales were also strong, boosted by demand for electrical appliances and televisions, as were sales of collectible items linked to the millennium.

In contrast to John Lewis's upbeat trading statement, current sales for M&S, which has become the subject of intense takeover speculation following a year of slashed profits and boardroom scuffles, are thought to be running at 15 per cent below last year's levels.

Richard Ratner, a retail analyst at Seymour Pierce, said: "The mid-market clothing retailers have taken a caning." He said Storehouse, Arcadia and Debenhams were likely to have had a "soft Christmas" along with M&S. But "aspirational" clothing companies, such as Oasis, Monsoon and Next, and companies in the durables sector, such as Dixons, will have enjoyed a strong trading period.

M&S, together with most major retailers, will release its next trading statement in January. Analysts have predicted that it will be accompanied by a profit warning.