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UPDATE 2-John Lewis ends run of weekly sales growth

Published 08/14/2009, 03:56 AM
Updated 08/14/2009, 04:00 AM
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* Department stores sales down 5.3 pct y/y in week to Aug. 8

* Says July sales numbers "overstated progress"

* Waitrose sales up 10.9 percent

(Adds detail, analyst comment)

LONDON, Aug 14 (Reuters) - John Lewis, the employee-owned group viewed as a barometer of British retail spending, posted a fall in weekly sales at its department stores, breaking a three-week streak of positive sales.

The group, which also runs the upmarket Waitrose supermarket chain, said on Friday sales at its 27 department stores fell 5.3 percent to 45.4 million pounds ($75.44 million) in the week to Aug. 8.

That followed rises of 5.6 percent, 6.3 percent and 5.3 percent in the three previous weeks.

Sales in the home category fell 7.2 percent, while fashion sales were down 2.8 percent, and electricals and home technology fell 6.2 percent.

John Lewis blamed the sales fall on hot sunny weather on Saturday Aug. 8, and tough comparative numbers last year.

Its department stores typically do better at this time of the year if the weather is cool and unsettled.

"After a successful July, last week saw much thinner trade," said managing director Andy Street.

"It was not, however, a surprise as the warm sunny day proved more of an attraction to our customers after a few wet weekends. The change in weather revealed that our scores in July overstated our progress, and it is still a challenge to match last year's trade."

A raft of UK retailers from DIY group Kingfisher and fashion chain Next to grocer Morrison and carpet seller Carpetright have reported better-than-expected trading in recent weeks, and on Tuesday the British Retail Consortium said underlying retail sales rose 1.8 percent year-on-year in July.

This had raised hopes of a rapid recovery from recession.

Nick Bubb, analyst at Pali International, reckons the fall in sales at John Lewis's department stores should not mean the end of a more positive trend.

"This dip looks like a blip, and we expect John Lewis to be up again over the next two weeks when the comps (comparative numbers) are soft -- everyone was too busy watching Team GB in the Olympics on TV last year to go shopping," he said.

Sales at the 213-store Waitrose chain increased 10.9 percent year-on-year to 81 million pounds.

The weekend sun boosted Waitrose sales, particularly for barbecue and picnic food. (Reporting by James Davey, editing by Will Waterman) ($1=.6018 Pound)

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