John Lewis sees sales surge prior to VAT hike

The John Lewis Partnership, which is regarded as a barometer of British retailing, has revealed sales surged ahead of the VAT rise as shoppers rushed to buy big-ticket items.

The renowned employee-owned department store said the bank holiday, on Monday 3 January, saw shoppers buy furniture and electrical goods as they looked to beat the VAT hike from 17.5% to 20% - which came into effect on 4 January.

Department store sales soared 38.7% - the biggest rise in the group’s fiscal year which ends this month.

It said sales of electrical goods and home technology goods were up 38.3%, while fashion items were 35.1% higher.

Online sales grew 42%, while sales at its Waitrose supermarket chain were up 2.9% year-on-year.

The figures come after a week which showed a mixed picture for retailers.

British retailing giant Marks and Spencer (M&S) said sales in the final quarter of 2010 were up despite the heavy snowfall.

The 127-year-old retailer which sells clothes, food and homewares said like-for-like sales in the UK, which exclude the impact of sales from new stores, were up 2.8% compared with a year ago.

Supermarket giant, Morrison’s reported a rise in Christmas and New Year sales, as did Sainsbury’s.

However, Tesco, which is the UK’s largest supermarket chain, said like-for-like sales, excluding petrol, grew by just 0.6% in the six week period to 8 January compared with a year earlier.

Tesco’s figures were worse than expected for the Christmas period and the company attributed the small rise to the wintry weather.

Mother and baby products retailer Mothercare, greeting card chain Clinton Cards, fashion chain Next, HMV, Dixons, Halfords and Argos-owner Home Retail Group all said sales suffered last month.

Discuss this in the Finance Markets forums

Story link: John Lewis sees sales surge prior to VAT hike