RETAILER John Lewis is ignoring its current period of strong year-on-year performances and is planning for no sales growth next year.
Andy Street, the managing director of John Lewis – which is seen as a bellwether of middle-class spending – is already concerned about the economic climate his company will face next Christmas.
This is despite sales figures which have been showing growth of more than 15% for each of the last six weeks – with its Liverpool One store consistently one of it best performers over this period.
In the first 19 weeks of its financial year to date, sales are 9% ahead of last year but also 3.3% better than 2007-08.
Mr Street said: “We are having a corking time at the moment. We are predicting double-digit figures year-on-year until the end of January.
“But there is uncertainty due to tax increases and the election.
“On 2010, I am bearish. We are expecting flat sales.
“Next Christmas is going to be a challenge. Customers will be less well off than this Christmas.”
His concerns are echoed by the Confederation of British Industry (CBI) which today warned workers should be braced for more job losses and pay freezes next year in a “fragile” recovery from recession. Its latest forecasts predict unemployment will peak at 2.8m next autumn – lower than first feared – with “very constrained” wage growth.
John Cridland, CBI deputy director-general, said the outlook was “brightening” but warned: “We will need to keep our nerve during early 2010, and there is no sign of a clear driver of strong economic growth. In the spring, many staff will face another cycle of wage freezes, and job losses will continue rising until the autumn.”
The CBI expects the UK to finally pull out of recession during the final quarter of this year with 0.5% growth, but said the economy will advance at a far more sluggish rate during the first half of 2010.
Chief economic adviser Ian McCafferty said: “The UK economy faces a number of structural hurdles over the coming two years, and this recovery – like that of the 1980s – will be relatively drawn out.
“Credit conditions will remain difficult as the banks slowly nurse themselves back to health, consumer spending will be shaped by the need to rebuild savings, and the public sector will soon have to tighten its belt. All three factors will act as headwinds to growth.”
