John Lewis` bullish Xmas insight prompts austerity rethink
11.01.2010
Retail analysts had to rethink their assumptions about the Christmas trading season after Reuters exclusively revealed on Nov 1 that bellwether John Lewis expected to beat its second half sales forecast by a big margin, casting doubt on widespread criticism that government austerity measures will hit middle class shoppers hard. Britain’s biggest department store group said in an interview that second half sales growth could exceed 6 percent, beating its 4 percent target, because its core middle-income shoppers will suffer less from government cutbacks than first feared. Retail director Andrew Murphy also gave Reuters the group’s first forecast for 2011. Panmure Gordon analysts cited the comments as a positive signal for Marks & Spencer, Britain’s biggest clothing retailer, while analysts at Singer Capital Markets and Arden Partners reproduced much of the interview in notes to clients. The Times, Daily Mail, Daily Express, Daily Telegraph and London Evening Standard newspapers all reported the comments, as did the closely watched Drapers Record industry journal. Shares in M&S gained 1 percent the next day, outperforming a flat European retail sector.
