John Lewis suffers as consumer morale dips

John Lewis has reported a slow down in sales as consumer confidence plummets.

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The department store chain reported a 2.2% dip to £50.1m in the week to 22 January, a slowdown from the previous week’s 4.1% growth.

Lesley Ballantyne, director of operational development, says that it was a “quieter week” but comparisons against last year are difficult because snow affected sales in January 2010.

John Lewis emerged from the Christmas trading period in a strong position, outperforming many of its rivals on the high street with a 9% sales increase for the five weeks to 1 January.

The chain also posted a record 38.7% increase in sales for the week to 8 January.

Despite the dip in sales John Lewis is confident that full year growth will be in double digits and is confident about the coming year.

The dip suggests that consumers are starting to feel the pinch from the increased VAT rate, and comes as consumer confidence drops to the lowest level for 12 months.

Consumer confidence has also dropped eight points in January, according to a study by GfK.

Nick Moon, managing director of GfK NOP Social Research, says that consumer confidence has only dropped by this much six times in the past 32 years and indicates that the governments austerity measures have hit consumers hard.

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