Record weekly sales at John Lewis have raised hopes of a bumper end to the Christmas shopping period but there are fears that the wider retail sector could be left with a profits hangover after heavy discounting.
The department store rang up £164.4m in takings in the week ending on Saturday night, a 4.2% increase on last year - including improvements in fashion and home ware - and 31.8% up on two years ago. Online sales rose 31% year-on-year.
Retailers are going through a critical few days which for many represent a make-or-break chance to restore their fortunes at the end of a difficult 2013.
Large promotions have included a 30% discount across clothing lines at Marks & Spencer, as well as price cuts at Debenhams, Gap, Argos and BHS.
John Lewis said trading this year over the Christmas period had taken a different shape with an early peak flattening out, then a surge in the final week, with the latest weekly sales up 9.7% on the week before.
Paula Nickolds, buying and brand director at John Lewis, said: “It’s clear that much of Britain has yet again taken shopping for Christmas right up to the wire.”
Howard Archer, chief UK and European economist at IHS Global Insight, said the pick-up was “solid rather than spectacular”.
He added that while John Lewis’s figures provided a useful insight into spending patterns, its customers tended to be less affected by the squeeze on incomes than the average consumer.
More broadly, many hard-pressed consumers appear to have delayed shopping in the hope of finding last-minute offers, he said. Retailers were conscious of the difficulties they face, especially after lacklustre sales in October and November.
Early Amazon sale: Page 27