Now even John Lewis feels the consumer spending squeeze

The latest sales figures from John Lewis suggest that the regional divide is opening up again.

by Emma Haslett
Last Updated: 06 Nov 2012
Mixed news from that stalwart of the chattering classes, John Lewis, which has just released sales figures for last week. Usually, we wouldn’t pay much attention to that short a time period – but as John Lewis is something of a bellwether for middle-class spending, and as it was Mother’s Day last week (and what mother’s heart wouldn’t soar at the prospect of a package from JL?), it’s fair to say all eyes are on the retailer. On the surface, things weren’t too bad: sales were up by 12%, that’s 3.1% higher than during the same period last year. But dig a little deeper, and things look uglier. Which could well be a sign of things to come…

John Lewis has tended to out-perform its competitors throughout the downturn, and it didn’t disappoint: sales rose to just under £70m last week, £10m more than at the same time in 2010. And weekly sales (excluding the rise in VAT) also rose, by 1.4%. Mother’s Day aside, the company attributed the strong performance to a number of factors, including sunny weather and promotions it ran last week.

But hold the figures up to closer scrutiny, and the signs aren’t as encouraging: while sales rose at the group as a whole, things aren’t looking good at individual stores. Of its 29 department stores, sales only rose at four – Brent Cross, Peter Jones (that’s in Sloane Square), Welwyn and Oxford Street. Those are all in (or around) London, as you may have noticed: the rest of its stores haven’t fared quite so well. Sales in Poole, for example, were down by a third, while sales in Bristol’s Cribbs Causeway shopping centre dropped by 13.7%. Although, admittedly, sales at JohnLewis.com grew by almost a third.

Nevertheless, it paints a discouraging picture of consumer spending, but particularly outside of London and the South East. And the Bank of England may have held firm on interest yesterday, but with inflation continuing to rise, chances are that could change in the very near future, causing credit-card toting customers to think twice about their purchases. Is it us, or can we feel those winter chills beginning to creep back in…?

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