Following John Lewis’ announcement of a second consecutive week slump in sales, worries are accumulating regarding the future of consumer confidence.
The reason this firm is noteworthy is because it has performed far better than the retail sector as a whole, and its failure forebodes a dark future for all. Department store sales slipped 0.9% just prior to January 29th, dropping to less than £50, preceded by 2.2% drop the week prior to that.
The group’s Retail Director, Andrew Murphy, said, “This was the last week in a trying but overall positive year of sales, yielding a total slip of only 1% for 2009-20010.”
Howard Archer, IHS Global Insight’s chief economist in the UK and Europe, reported that consumers’ purchasing power is being drained from their grips as the inflation pounds them and their earnings dwindle. The figures simply reinforce the fact that consumers are losing their ability and willingness to spend.
The big three Purchasing Managers’ Indices reflected improved manufacturing, services, and construction for the month of January. In spite of the great outcome this week, what could have turned into a comeback, the lack of consumer confidence may stifle it.
Retail Researcher for Seymour Pierce, Kate Calvert, reported, “Regarding comparables, January 29th finished a ‘clear’ week. Yet, the stats affirm the failing of the industry as a whole, that John Lewis cannot even escape.”
Murphy said, “This year will be the most trying, yet we are planning our finances for expansion.”
“Our optimism derives from the persistence of our partners in providing fantastic service, a wide assortment, and actual value. We know we will perform superior to our competitors again this year.”