Retailer John Lewis announced on Friday a fall in their weekly sales figures. The high street giant reported that sales fell by 0.8 per cent down to 55 million pounds in the week ending May 28. And sales were down 3 per cent when VAT sales tax (raised earlier this year) was excluded.
The company which has been performing well this year in comparison with many rivals felt the performance was ‘credible’, compared to its sales numbers at the same time a year ago.
The firm, owned by its employees, issued this statement, “We had a very good week of weather against us last year and this year there was rain and even hail in parts of the UK. We also have tough comparisons in EHT (electrical and home technology) to contend with due to buoyant sales of TVs for the (2010 football) World Cup”.
John Lewis also owns supermarket chain, Waitrose whose sales figures increased 7.3 per cent in the same week to May 28. Promising sales figures of £104.2 million have in this case been attributed to the recent, cooler than average weather, prompting us to splash out on warming, hearty food.
On Thursday, owner of B&Q, Kingfisher announced its outlook on consumer spending was still cautious, despite benefiting from an uplift in sales on barbeques, grills and garden furniture due to unseasonably warm and dry weather earlier in the year.
The higher consumer spending in April was accounted for by a late Easter, the fine weather and of course Kate and William’s Royal Wedding, providing a feel good factor which helped loosen wallets and purses.
However, Chief Economist at IHS Global, Howard Archer suggests that the figures from John Lewis show that people are again acting with caution when it comes to spending their money.
Consumer spending faces ‘perfect storm’ of conditions
Consumer spending is being faced with a ‘perfect storm’ of high inflation which continues to rise, stagnant wage growth, high levels of unemployment, high levels of personal debt, the fear of rising interest rates and not least Downing Streets series of cuts and savings.
Archer said, “The fact is that consumers are under pressure on a number of fronts so the likelihood is that consumer spending will remain muted over the coming months”.