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By
Reuters
Published
Sep 11, 2009
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John Lewis dept store sales add to recovery hopes

By
Reuters
Published
Sep 11, 2009

LONDON, Sept 11 (Reuters) - John Lewis, the employee-owned group viewed as a barometer of UK retailing, posted a small rise in weekly department store sales against a tough comparable number last year, adding to signs of a consumer recovery.

John Lewis

John Lewis [JLP.UL] said on Friday 11 September that sales at its 27 department stores rose 1.0 percent year-on-year to 54.1 million pounds ($90.5 million) in the week to Sept. 5, following a 2.4 percent rise the week before.

"The combined effects of a late "Back to School" surge, the resurgence of our consumer electronics assortment and some good weather made for a result last week that was better than we had dared hope for," department stores commercial director Andrea O'Donnell said in a statement.

"Looking ahead ... we will be annualising against weaker figures after the collapse of the first big financial institution last year," she added referring to the collapse of U.S. bank Lehman Brothers.

"I see every reason for a mood of quiet optimism."

The upbeat comments chime with signs from several other Britain retailers that consumer spending is starting to pick up after a series of big interest rate cuts.

Household goods group Home Retail (HOME.L) and electricals retailer Kesa (KESA.L) both beat quarterly underlying sales forecasts on Thursday 10 September, though sales were still down.

Official data have generally supported hopes of a tentative recovery, though analysts were disappointed this week by a 0.1 percent drop in the British Retail Consortium's measure of UK retail sales for August, and some are cautious.

"Consumers continue to face serious obstacles that are likely to limit spending for some time to come. These notably include sharply higher and rising unemployment, low earnings growth and heightened debt levels," said Global Insight economist Howard Archer.

John Lewis said sales of electrical and home technology products rise 3.7 percent in the week ended Sept. 5, while fashion sales were up 1.7 percent and sales of home-related goods down 2.4 percent.

Sales at the group's upmarket Waitrose grocery stores were up 7.6 percent year-on-year to 82.5 million pounds, the latest in a succession of strong gains.

($1=.5977 Pound)

(Reporting by Mark Potter; Editing by Hans Peters)

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