UPDATE 1-John Lewis weekly dept store sales down 9.7 pct

Fri Nov 14, 2008 3:16am EST
 
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* Week to Nov. 8 dept store sales 57.8 mln pounds

* Eighth week in row of falling dept store sales

* Waitrose sales up 0.6 pct

(Adds detail, analyst comment)

LONDON, Nov 14 (Reuters) - John Lewis Partnership [JLP.UL], the employee-owned group seen as a barometer of British retail spending, added to the gloom in the sector as it posted a 9.7 percent fall in weekly sales at its department stores.

That was the eighth decline in a row.

The group, which runs 27 UK department stores, said on Friday that week to Nov. 8 sales in the division were 57.8 million pounds ($86.19 million).

Sales in the homewares category were down 14.8 percent, electricals and home technology fell 8.5 percent and clothing sales were down 6.0 percent.

"The combination of economic uncertainty and grim weather at the end of the week made trading that much more difficult," John Lewis said of the department stores outcome.

"The economic climate continues to be difficult, but we hope with last week's interest rate cut, together with the news of our own investment in both Bluewater and Dublin, and our new TV advertising campaign, we will continue to outperform a difficult market."

Nick Bubb, analyst at Pali International, estimated the fall on a like-for-like basis, which strips out the impact of new space, at 14.5 percent.

He described the data as "awful", said it augurs badly for current trading at Marks & Spencer (MKS.L), Debenhams (DEB.L) and Next (NXT.L) and forecast sales for the week to Nov. 15 would be even worse, given the mild weather compares to a cold and frosty week last year.

Many UK retailers are struggling as consumers cut back on spending amid rising unemployment, falling house prices and growing fears of recession.

"The grim financial news is now beginning to markedly impact the consumer environment with a vengeance," said Freddie George, analyst at Seymour Pierce.

Sales at John Lewis' chain of 194 Waitrose supermarkets increased 0.6 percent to 76.9 million pounds, with a wine promotion boosting sales.  Continued...

 

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