Business

John Lewis boss warns on Black Friday retail frenzy

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Media captionJohn Lewis managing director Andy Street: "My personal hope is that this is the high water mark for Black Friday"

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.

"My personal hope is that this is the high water mark for Black Friday. I don't think we can put the genie back in the bottle but do we need to stoke that fire anymore? I personally hope not," he added.

Christmas sales

Mr Street said Black Friday put retailers' back end operations, such as online deliveries, under pressure, and while he expected promotions in key electrical items to continue, he hoped that fashion brands and other shops would be "more confident holding their price".

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.

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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.

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'

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.

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.

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.

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