High street retailer John Lewis followed up its outstanding Christmas with a whimper rather than a bang as sales dropped during the first week of the year.
The company's latest figures show a drop of 2.2% in year-on-year sales for the week up to January 7, coinciding with its ongoing clearance sales.
The decrease, seen by economists as a possible sign of consumer retrenchment, comes after a very successful Christmas for the retail giant which saw it take half a billion pounds due to strong sales of clothes and electrical items.
Clearance sales began in-store on December 27 and will last until Sunday, but the figures released today suggest that they have lost their pulling power in the new year.
Howard Archer, chief UK and European economist at IHS Global Insight, said that the figures were "reasonable" because there was one less trading day compared with last year, but also pointed out that John Lewis had the advantage of trading from three more stores this year.
He said: "It must also be borne in mind that while John Lewis is seen as a bellwether for the retailing sector, it has been a clear outperformer for some time and this was the case over Christmas.
"Given the pressure that consumers are under from still high inflation, muted wage growth, rising unemployment and elevated debt levels, and also given their serious worries over the economic outlook, the concern is that they will hunker down for an extended period after a late flurry of spending in the run-up to Christmas and taking advantage of the best of the bargains in the clearance sales."
John Lewis's strong Christmas performance was buoyed by online revenues, which went up 28% as shoppers used its click and collect service and took advantage of an early internet clearance which began on Christmas Eve.