Tsunami donations hit High Street sales

THE public's generosity in giving to the Asian tsunami disaster appeal is having a knock-on effect on the retail sector, hitting High Street sales last month.

Department stores chain John Lewis said its sales have fallen by 1% over the past five weeks, and believes many of its competitors are faring even worse.

'Many of our customers spent a lot of money over Christmas and in the January sales, and then they gave generously to the tsunami appeal. So many of them decided not to go shopping in February,' said Sir Stuart Hampson, chairman of the John Lewis Partnership.

But he believes the group is at least holding its own against other retailers and performing better than many.

Earlier this week the French Connection fashion chain reported a 17% slumpin sales over the past few weeks and last week chemists group Boots shocked the City with a profits warning after a 'dramatic' fall indemand. Boots chief executive Richard Baker said shoppers were spending only on the basics.

Despite the recent sales slowdown John Lewis did well last year, pushing its trading profits ahead by 12% to £324m in the 12 months to 29 January, on sales 6% higher at £5.3bn. Pre-taxprofits rose 24% to £216m.

Thanks to the strong performance, employees have been awarded a bumper bonus, with 63,000 of them sharing a £106m payout. That is equal to more than seven weeks' salary and a 21% increase on the previous year's figure and the highest payout for seven years.

{2} Hampson highlighted particularly good results from the refurbished Peter Jones store in London's Sloane Square but said the congestion charge continues to hit its flagship John Lewis store in Oxford Street.

'Two years on and Oxford Street is still running at figures below thepre-congestion charge levels, despite the fact that we now open on Sunday. It is a blunt instrument and it is affecting not just the retail sector but the whole of the leisure industry in London.'

The spending slowdown has not affected John Lewis's Waitrose supermarketschain, which is 'powering ahead'. Its like-for-like sales have risen by 5% in the past five weeks and it continues to increase itsmarket share. Overall sales have surged by 20%, boosted by the recent acquisition of 19 stores from rival Morrisons.