John Lewis posts lower sales in a gloomy February

London: John Lewis Partnership, owner of the largest UK department-store chain, said yesterday sales growth slowed in February as fewer people made shopping trips to town centres.

Sales growth slowed to 1.7 per cent in the four weeks ended February 23, from 7.7 per cent a year earlier, the closely held London-based company said in a statement.

The number of shoppers visiting UK stores declined for the seventh consecutive month in February, Experian Group's Footfall unit said in a report yesterday. British consumer confidence fell to a 13-year low this month as a housing market slump and higher prices unsettled shoppers, GfK NOP said.

"February as a whole has to be judged as soft," John Lewis Managing Director Andy Street said in the statement. The sales number "is a slowdown from the cracking December and January form, but is, we suspect, still very respectable against the market."

Rising costs

Higher food costs, mortgage rates and utility bills are putting pressure on disposable incomes, leaving Britons with less money to spend on shopping. The Bank of England cut its interest rate by a quarter-point to 5.25 per cent on February 7 in response to slowing spending.

"We've always said that John Lewis are a good bellwether for the wider sector," Andrew Wade, an analyst at Seymour Pierce said. "This news, combined with the consumer confidence survey and what we are hearing from the high street, is weighing on retail stocks today."

Home Retail Group, the owner of the Argos and Homebase chains fell 10.25 pence, or 3.8 per cent, to 259 pence in London. DSG International declined 2.25 pence, or 3.4 per cent, to 63.5 pence. HMV Group, the UK's largest music retailer, dropped 5.75 pence, or 4.3 per cent, to 127 pence.

"After a better than expected discount driven January, February's poor figures underline the tough trading conditions for UK retailers," Ernst & Young analyst Jonathan Foster, said in Experian's report. "With little change in consumer sentiment in 2008, the sector outlook is gloomy."