John Lewis enjoys record Christmas as rivals languish

By Neil Maidment

LONDON (Reuters) – British department stores group John Lewis scored a 7.2 percent rise in Christmas sales, as strong demand for items from tablet PCs to coffee machines helped it become one of this year’s likely winners in the UK retail sector.

The improvement comes despite unusually stormy British weather in the run-up to Christmas and a still-cautious approach by many consumers, sparking speculation that many retailers would struggle during the key holiday period.

John Lewis said on Thursday sales from online outlets and shops rose to 734 million pounds ($1.2 billion) in the five weeks to December 28, including its biggest-ever taking of 35.6 million on day one of its in-store clearance sale on December 27.

The increase contrasts with rival Debenhams, which kicked off the UK retail reporting period on Tuesday with a profit warning after a hoped-for surge in last-minute Christmas shopping failed to materialise despite heavy discounting.

John Lewis’s performance is the latest consumer endorsement for the employee-owned group, which has often outperformed competitors in recent years due to its strong online offering, modern stores and more affluent customer base.

The company also captured shoppers’ attention this year with an animated advertising campaign featuring a bear being woken from hibernation by an alarm clock gift, allowing it to appreciate a decorated Christmas tree for the first time.

Group like-for-like sales, which strip out the impact of new stores, rose 6.9 percent.

TOUGH FESTIVE PERIOD

Elsewhere a profusion of shop window discount posters in recent days has illustrated retailers’ attempts to attract more customers in a tough market, made harder by a spell of gales and heavy rain which kept many shoppers at home. Research this month by accountants PwC found 72 of 100 town centre retailers were offering discounts or advertising promotions.

A decision by Britain’s biggest clothing retailer Marks & Spencer to slash 30 percent off all clothing prices in the Christmas build-up – the group’s first such move in five years – has raised fears it too has endured a tough festive period.

Next, Britain’s second-biggest clothing retailer, is due to publish a trading update on Friday, while M&S is due to report on January 9.

Reflecting Britons’ increasing tendency to shop via their smartphones and tablets, John Lewis said online sales in the five weeks jumped 22.6 percent on a year ago and accounted for 31.8 percent of total sales in the period, helped by record online orders on “Black Friday” (November 29), a U.S.-originated promotion day becoming more common in Britain.

Electrical and home technology sales rose 10.7 percent, while fashion and beauty increased 8.5 percent, the firm said.

“With new highs in branches as well as for johnlewis.com, this has been a genuine omni-channel Christmas,” Andy Street, managing director of John Lewis, said, adding the sales growth boded well for trading in 2014.

($1 = 0.6051 British pounds)

(Editing by David Holmes)

John Lewis enjoys record Christmas as rivals languish