John Lewis sees sales rise ahead of VAT increase

John Lewis has delivered its biggest weekly sales rise so far this financial year, as it benefited from a surge in shopper numbers ahead of the 4 January VAT rise.

The department store chain delivered a 38.7 per cent leap in revenues to £74.7m for the week to 8 January, boosted by a 42 per cent jump in online sales.

Maggie Porteous, the head of selling operations at John Lewis, said: "As the trading year draws to a close, what a fantastic time to put on the best percentage increase against last year."

In addition to the surge in shopping ahead of the VAT increase, John Lewis also benefited from the extra bank holiday, on the first Monday of 2011, and being up against soft sales in the same week last year when there was snow.

Nat Wakely, the director of selling operations at John Lewis, said it had performed strongly across all departments last week and this had continued, including on big ticket items, after the VAT rise. "There was not a drop off post 4 January," he added.

Mr Wakely also pointed out that its latest weekly sales were up by 11 per cent to the end of Thursday. While John Lewis is slightly more cautious about the outlook for 2011, Mr Wakely said the most recent figures gave it confidence about its prospects this year. "For the year as a whole, we are still optimistic," he said.

The data shows that John Lewis, which has 28 department stores and four John Lewis at Home shops, confirmed its place among the big winners over Christmas and the clearance sales.

Despite last month's snow, retailers including House of Fraser, Majestic Wine, JD Sports Fashion, Marks & Spencer and Sainsbury's have all lifted sales. But the near-Artic conditions were cited in dire trading and profit warnings posted by Mothercare, HMV, Theo Fennel and Alexon.

John Lewis said all three departments – fashion, home and electricals – had a "storming" week, proving that VAT was far from the only story at its stores over the seven days to 8 January. Sales in its overall home category rose by 43 per cent, as consumers drove a 53 per cent rise in gifts and decorative accessories.

Fashion was also a strong performer, up 35 per cent, while the electricals and home technology department grew by 38 per cent.

Howard Archer, the chief European economist at IHS Global Insight, said: "The very strong jump in John Lewis sales indicates that consumers were very keen to take advantage of genuine bargains in the clearance sale." However, he cautioned: "It has to be borne in mind that John Lewis is very much an out-performer."

Sales at Waitrose, the food chain that along with the department store forms the John Lewis Partnership, rose by 2.6 per cent over the week to 8 January.

The strong sales at John Lewis and Waitrose so far this financial year, which ends on 29 January, means JLP could beat its record £379.8m annual profits posted in 2008.

Sales rise at Ted Baker

The quirky designer brand Ted Baker has reaffirmed profit expectation after it fashioned an uplift in Christmas sales despite the severe weather.

The group boasted that there had been "no significant promotionalactivity" before Christmas Day, which helped it maintain gross margins. Retail sales rose by 7.6 per cent for the period from 14 November to 8 January. Chief executive Ray Kelvin described theperformance as "pleasing".

Profits to tumble at Flying Brands

Flying Brands, the home-shopping group, has issued a profits warning after blaming snow for "severely disrupting" its delivery of perishable goods, notably Christmas flowers, for the three months to the end of December. The online retailer, which sells flowers, gifts and gardening goods, said like-for-like sales fell by £700,000 to £5m over the period and that full-year profits would be "materially below market expectations".