John Lewis off-trend as sales soar 20%

The latest manufacturing data may not be very cheery - but at least John Lewis has proved that shoppers are still spending...

by James Taylor
Last Updated: 19 Aug 2013
We've had a lot of gloomy economic news to report lately, so it's nice to be able to write about something positive for once: apparently the summer sale at department store John Lewis got off to a flying start, with sales in the week to June 25 up a whole 20% up on the same period last year. Debenhams has also been having a good time of it lately. So have rumours of the high street's demise been greatly exaggerated? That would be nice; but a closer look at these JL figures suggests we shouldn't jump to any conclusions...

For a start, while that headline sales growth figure is undoubtedly eye-catching, it's also slightly misleading. JL had two extra days of sales this year, while this time last year, shoppers were distracted by some glorious weather and England embarrassing themselves at the World Cup. Nonetheless, it's still a pretty good showing. Apparently childrenswear sold particularly well, while IT products also flew off the shelves as customers took advantage of price reductions.

Meanwhile over at Debenhams, beauty products have been selling like hot cakes, helping boost overall like-for-likes by 1.5% for the 17 weeks to June 25. Management has been hailing the 'lipstick effect' - the oft-seen recessionary phenomenon where shoppers splash out on little treats to make them feel better about the world.

John Lewis is often cited as a high street bellwether. But the big question is: do these figures really suggest an upturn in confidence? Or is it just a case of shoppers taking advantage of sale prices to bag a long-awaited bargain - only to then pull in their horns for the foreseeable future? Much though we'd like to hope it's the former, the weight of gloomy economic data still floating around does rather suggest the latter.

Speaking of which, there was (as usual) one gloomy piece of data to emerge today: the latest Chartered Institute of Purchasing & Supply index of the manufacturing sector recorded a figure of 51.3 in June - down from the 52 recorded in May, and getting ever closer to the 50 mark that marks growth as opposed to contraction. Admittedly, any growth is better than nothing - but that's the slowest rate of expansion in nearly two years, with both exports and domestic orders suffering. And it certainly doesn’t look like the sector is powering ahead in the way the Government hoped…

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Finance Retail

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