Photo Illustration: Tom Hall/Bloomberg

John Lewis Provides Holiday Cheer as Store's Online Sales Soar

  • Online sales accounted for 40% of chain's holiday revenue
  • Retailer is `microcosm' of what's happening in retail: analyst

John Lewis tapped into British shoppers’ growing penchant for online shopping over Christmas, fueling sales growth at the U.K.’s biggest department-store chain as most retailers struggled.

Web sales rose 21 percent in the six weeks ended Jan. 2, the employee-owned company said Wednesday, more than making up for a decline in store-based revenue.

John Lewis Plc distribution center

Photographer: Chris Ratcliffe/Bloomberg

John Lewis’s performance enabled the company to maintain its full-year profit forecast at a time when many retailers are finding growth hard to come by. Marks & Spencer Group Plc is expected by analysts to report a drop in quarterly sales on Thursday. Online sales accounted for 40 percent of John Lewis’s revenue over the holiday period, up from 36 percent a year ago, following years of investment in distribution and information systems.

“John Lewis’s trading statement is a perfect microcosm of what is occurring in mainstream retail right now: in-store it’s very tough, but online growth is strong,” Jonathan Pritchard, an analyst at Peel Hunt, said in a note.

John Lewis’s performance over Christmas is likely to be among the best in the industry. The retailer has been at the forefront of a shift toward online ordering, with sales of items collected in-store gaining 16 percent and representing half of all orders.

Total sales at John Lewis rose 6.9 percent to 951 million pounds ($1.4 billion) in the holiday period, even though sales at the retailer’s stores fell 1.2 percent. All departments contributed to the growth, including clothing, where many retailers saw sales slide because of mild November and December weather.

The post-holiday clearance was particularly strong, with sales gaining 23 percent in the week ended Jan. 2, the company said.

John Lewis department stores are part of a partnership that also includes Waitrose supermarkets. Same-store sales at Waitrose fell 1.4 percent in the six-week period as the chain fought to combat a market dominated by the growth of discounters.

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