John Lewis reported a drop in sales last week, after November’s Black Friday sucked demand forward from December and shoppers left their Christmas purchases to the last minute in the hope of bigger bargains.
Sales at the department store chain were £160.6m in the week to last Saturday, up 6.5% on the previous week but down 2.4% from a year ago. John Lewis, seen as a barometer of the high street, said customers were delaying their Christmas shopping. Online sales rose 5.5% year-on-year.
It also pointed to the “changing shape of Christmas trade, with an early peak at the end of November” when British retailers fired the starting gun on the festive shopping season with the adoption of the US tradition of Black Friday.
Andrew Murphy, retail director at John Lewis, said Black Friday looks to have been the biggest shopping day of the year, with 27 December, when the in-store post-Christmas sale begins, set to be the second biggest. “It’s fair to say all our expectations about yesterday were met and I don’t see any reason for today to be any different. Christmas Eve tends to be a quieter day. Only the customers with nerves of steel wait until then. Very often it’s the menfolk that come in to grab a bottle of perfume. Usually trade begins to fade away at 2pm, but I think it will be slightly busier than last year.” Murphy added that John Lewis was benefiting from the delivery problems experienced by some of its competitors.
The retailer is giving customers an extra day to order click and collect items to its shops, by extending the cut-off date for orders to Tuesday for collection on Christmas Eve. The clearance sale starts online on Wednesday.
The John Lewis fashion, home, menswear and sports departments posted record sales weeks, with sales of sports technology such as running watches leaping 90%. Childrenswear posted an 11% increase in sales, fuelled by 24% growth in nightwear, owing to the enduring popularity of onesies.
Retail analyst Nick Bubb said: “John Lewis continues to run rings around M&S and other high street rivals and it is clearly outperforming the market in general, but its electricals bias worked against it last week.”
Sales of electrical items and home appliances at John Lewis slid 10.8%, a sign of the growing importance of Black Friday on pre-Christmas shopping. Small items fared better: GHD hair straighteners posted 44% growth and sales of Nespresso coffeemakers were up 13%.
Howard Archer, chief UK and European economist at IHS Global Insight, said: “Retailers are very aware that extended low earnings growth and high debt levels has limited many people’s purchasing power and this is likely to keep them active on the promotions front right up to Christmas Eve as well as in the post-Christmas clearance sales.
“It is very possible that Christmas shopping will end up being pretty strong overall this year, but it will be interesting to see to what extent the discounting and promotions have hit retailers’ margins.”
