WITH its department stores offering consistently high service and good prices, it has long been an institution considered almost immune to the looming threat of recession.
But now even high street favourite John Lewis is starting to feel the pinch as shoppers slam on the buying brakes to cope with rocketing petrol, energy and food bills.
New figures released by the firm yesterday show it has recorded a decline in s
tore sales for the seventh time in eight weeks.
Takings plummeted by 8.3 per cent for the week up to 28 June, a sharp increase on the 1.2 per cent drop of the previous week.
Worst hit was the flagship store in the enormous Bluewater centre in Kent, where profits plunged 25 per cent for the week up to 28 June compared to last year.
In Scotland, stores generally performed above the UK average. The Glasgow store suffered the sharpest decline, with sales dropping 9 per cent on last year, Edinburgh sales fell by 5 per cent and Aberdeen by 4 per cent.
Phil Hullah, the firm's commercial director, acknowledged there was "no doubt that trade … proved challenging" and there was "subdued customer sentiment".
He said fashion had sold best, but homeware fell 13 per cent and electrical goods 16 per cent.
But he remained upbeat, saying customers had flocked to the first day of their clearance sale on Saturday, which had recorded 20 per cent growth compared to two years ago.
The drop in sales follows the shock announcement by Marks & Spencer this week that its first quarter like-for-like sales had dived by 5.3 per cent.
Howard Archer, chief UK and European analyst at Global Insight, said: "John Lewis department store sales are generally seen as a good bellwether for the health of consumer spending. Consequently, the evidence of markedly faltering sales, following on from this week's very disappointing figures from Marks & Spencer, clearly points to consumers reining in their spending in the face of squeezed purchasing power and other serious pressures.
"Disposable income growth is muted, while purchasing power is being squeezed significantly by rising utility bills and elevated food prices, and also by higher mortgage repayments for many householders as a result of the credit crunch."
He added that the rush to the start of the John Lewis clearance sales "may well be a sign that pressurised and price-conscious consumers are looking to concentrate their purchases when there are genuine bargains available".
And despite its gloomy performance, the John Lewis store in Edinburgh was bustling with shoppers yesterday.
Some were attracted by the sales, with reduced goods on offer including a 42-inch LCD television reduced from £799 to £559, a dining table reduced from £695 to £350, and men's suits for £95 – less than half the original price.
And not all shoppers were attracted simply by the sales. Retired couple Richard and Mary Munro said the quality of the service kept them going back.
Mr Munro said: "They offer good service and the assistants do seem to know what they are talking about.
"I bought a CD and DAB digit-al radio last week and I couldn't figure out how to work it. I went back in and they showed me what I was doing wrong – they have great after-sales service."
Margaret Taylor, from Edinburgh, another loyal John Lewis shopper, did admit that the store was a bit quieter than usual but thought this could be due to the trades holiday.
The full article contains 587 words and appears in The Scotsman newspaper.
