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John Lewis boss warns on Black Friday retail frenzy | |
(about 9 hours later) | |
John Lewis's managing director has warned that UK firms should reconsider heavy discounting on Black Friday. | |
The widely promoted sales day at the end of November brought the company its biggest trading week on record, with sales up 22% on last year. | |
However, Andy Street said the US-inspired phenomenon was "more challenging profitability-wise". | |
"We've got to ask if it's right to concentrate trade so much in that one period," he told the BBC. | |
Mr Street was speaking after the department store chain issued its Christmas period sales, showing that sales in the week of Black Friday outpaced the week of trading in the run-up to Christmas. | |
Overall, in the five weeks to 27 December, total like-for-like sales rose 4.8% to £777m, with shop sales flat, but online purchases up 19%. | |
Click-and-collect represented 56% of online sales, overtaking home delivery, the firm said in a trading update. | Click-and-collect represented 56% of online sales, overtaking home delivery, the firm said in a trading update. |
Electrical and home technology products were the best sellers for John Lewis on Black Friday and finished with a 6.8% year-on-year rise for the five-week period. | |
Homeware growth was 2.3% up on last year for the five-week period. Fashion and beauty increased by 7.8% on last year, helped by "very strong" online trading, John Lewis said. | |
'Absolutely critical' | 'Absolutely critical' |
John Lewis is also pressing ahead with plans to increase its store numbers from 42 to 65, with a focus on locations such as Birmingham, Leeds and Oxford. | |
Despite the big jump in online shopping, Mr Street said establishing a physical shop presence was key to winning internet customers, because they frequently browsed products before ordering online. | |
"The role of the shop is absolutely critical in providing the online sales," he said. | "The role of the shop is absolutely critical in providing the online sales," he said. |
News of how other big retailers have fared will come this week. | |
On Thursday, M&S, whose online deliveries last month suffered delays, is due to give an update on trading. | On Thursday, M&S, whose online deliveries last month suffered delays, is due to give an update on trading. |
And on the same day, Tesco will also update investors on sales, amid reports that the supermarket giant could announce big changes in the way it deals with suppliers. | And on the same day, Tesco will also update investors on sales, amid reports that the supermarket giant could announce big changes in the way it deals with suppliers. |
Incorrectly booking payments from suppliers was at the centre of Tesco's 2014 accounting debacle that led to a £263m overstatement in profits. | Incorrectly booking payments from suppliers was at the centre of Tesco's 2014 accounting debacle that led to a £263m overstatement in profits. |