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Post-Brexit sterling plunge a big issue, warns John Lewis boss

Published 08/07/2016

John Lewis' Andy Street said say his major concern is the potential drop in consumer spending growth
John Lewis' Andy Street said say his major concern is the potential drop in consumer spending growth

The boss of John Lewis has warned that the plunge in sterling could become a problem for the department store chain.

Andy Street said that although the firm is "fully hedged" against currency fluctuations for 2016/17, next year it could be an issue.

He said: "The big issue is the decline in exchange rates. We hedged this year but the issue is next year, it will have an effect. If inflation gets into value chain, it will feed through."

Since the referendum result, sterling has collapsed against both the dollar and the euro.

Earlier this week, John Lewis saw sales growth slow in the seven days following Britain's decision to leave the European Union.

But Mr Street denied it was anything to do with Brexit, flagging it was more likely linked to an earlier start to its summer clearance sale and the weather.

"The market has been challenging even before Brexit. Since the result, there's been no implication for sales," Mr Street said.

However, Mr Street did say that his major concern is the potential reduction in the growth of consumer spending as the economy looks set to fall into recession.

"For us to start being concerned, the obvious thing for us is a reduction in the growth in consumer spending. But has it actually changed behaviour? It's just far too soon to say."

His comments come as a survey by GfK showed consumer confidence fell at the fastest pace in 22 years following the referendum result.

Mr Street called for a swift resolution to Britain's trade relationships with Europe and the rest of the world and clarity on the status of Europeans living and working in Britain.

"At the moment this is a political crisis, it's not an economic crisis. But one could turn into the other if not properly handled. We need to know the solution to terms of trade and want it done as soon as possible."

He also dismissed reports that he is planning to run for political office - as the West Midlands' first elected mayor on a Conservative Party ticket - as "speculation".

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