John Lewis upbeat despite tough conditions

Department stores-to-Waitrose supermarket chain John Lewis said today it was confident of extending its market-busting performance into 2006.

The group said it expected to see “continuing pressure” on retailers, although it had been encouraged by its performance over Christmas with like-for-like sales growth of 7.1% at its department stores and 6.2% at Waitrose.

Sir Stuart Hampson, chairman of John Lewis Partnership, said: “The sense of relief that Christmas turned out brighter than many feared should not disguise the fact that conditions in retailing remain tough, with strong competition and price deflation keeping pressure on margins.”

John Lewis, which has 27 department stores, endured a tough first half to its financial year but bounced back in November with the onset of colder weather.

It said the growth in sales in the seven weeks to January 7 reflected factors such as a more targeted product range, better availability and more focused marketing. Sales through the internet and call centres were also up.

Over the period fashion sales lifted 6.4% with electricals and home technology ahead 26% and home gifts 1.8% stronger than a year ago.

The buoyant sales figures for the seven-week period were widely expected after regular updates from the company over the holiday period.

At Waitrose, which operates from 173 sites, total sales were up 9.5% with the like-for-like figure ahead by 6.2% when excluding petrol sales.

John Lewis is the UK’s largest example of worker co-ownership with all 63,000 permanent staff being partners in the business. It has annual turnover of more than £5bn.