Online shopping drives John Lewis sales as high street stores suffer

Department store reports lower Christmas sales at 40% of outlets, but online sales surge 22%

In a sign that Christmas trading has been harder than usual for retailers, the high street bellwether John Lewis reported sales at about 40 per cent of its stores were down on the previous festive period.

Total sales over the five weeks to 28 December jumped 7.2 per cent compared with 2012, or 6.9 per cent on a like-for-like basis, hitting £734m. However, nearly all of the growth came from online sales, which now account for about one in three of all John Lewis purchases, up from 26.5 per cent in 2012.

Online sales jumped 22.6 per cent, compared with a 1.2 per cent expansion for store sales.

"We are still growing and we're pleased about that" said John Lewis managing director Andy Street. He also claimed vindication for his decision to hold off from heavily discounting until after Christmas Day, unlike some rivals.

Mr Street revealed that when sales on 27 December finally started, takings hit an all-time high of £35.6m for a single day's trading.

John Lewis is usually the first to report Christmas trading figures, however Debenhams released an unexpected profit warning on Tuesday as bosses admitted Christmas had been disastrous for the company.

Debenhams said profits would be down £15m more than expected as the final-week boost before Christmas failed to materialise. Analysts expect profits at Marks & Spencer, which cut clothing prices by 30 per cent over the weekend before Christmas, also to have suffered.

Retail sales account for about only 6 per cent of GDP, but they are regarded as an important barometer of wider consumer sentiment, which has largely been driving the recovery over the past 12 months.

Christmas is a crucial trading period for most retailers. Earlier this week Ipsos Mori's Retail Traffic Index showed that customer trips to non-food stores last month rose 0.7 per cent year on year.

Electricals and home technology performed particularly well for John Lewis, with sales up 10.7 per cent. Some commentators have pointed out that the margins in electricals are much lower than in other departments, however Mr Street said that sales were strong enough across the whole company for this not to be a concern.

"Electrical sales were ahead of our forecasts and it was not just technology like iPads and tablets," he said. "Things like coffee machines, mixers, blenders and other small electrical gifts sold really well."

Elsewhere, fashion and beauty was up 8.5 per cent, which could be an interesting indicator for other fashion retailers when they report their results after many have privately bemoaned the mild autumn and winter weather.

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