John Lewis confident on Xmas sales

By James Davey

LONDON (Reuters) - John Lewis JLP.UL, the employee-owned group seen as a barometer of retailing, posted a 13.2 percent rise in weekly department store sales, boosting confidence as the key Christmas shopping period gets underway.

The firm said sales at its 28 department stores and one John Lewis at home store, were 65.4 million pounds in the week to November 7, up from 57.8 million pounds in the same period last year, when trading conditions were depressed by the financial crisis and the group had two less stores.

The outcome represented an eighth consecutive week of increased department store sales.

"It was an excellent week last week... our second best movement of the half year to date. We saw double-digit advances from six out of seven days, and also across all three buying directorates," John Lewis said.

The result "should give us great confidence as we enter the last seven weeks to Christmas."

The sales increase was driven by a 20.4 percent rise in the electricals and home technology category. Homewares sales were up 14.6 percent and fashion sales increased 12.4 percent. Many British retailers have been battered by recession but a survey on Tuesday showed sales grew in October at their fastest annual pace since April.

"This boosts hopes that consumer spending will increase in the fourth quarter (after falling since the second quarter of 2008) and help the economy to finally return to growth after six quarters of overall sharp contraction," said Howard Archer, chief economist at IHS Global Insight.

But he cautioned that the upside for consumer spending may be limited for some time to come as consumers continue to face serious headwinds, pointing to rising unemployment, low and slowing earnings growth and heightened debt levels.