Sales at retail bellwether John Lewis have continued to decline as confidence on the high street wanes.

The department store group said that sales in the week to Saturday fell 13 per cent.

Despite a 10 per cent week-on-week uplift in sales, the department store chain said that trade was affected by the announcement of the VAT reduction a week ago, and which only came in to effect today.

It added that shoppers’ confidence was further bruised following the news that Woolworths and MFI hit the buffers on Wednesday.

The retailer said: “Despite this, sales in John Lewis branches picked up significantly towards the end of the week as customers appreciated the leading department store group’s passing on of the 2.5 per cent benefit from the VAT reduction early and the fact that its reassuring ‘never knowingly undersold’ price promise means that it will always match the lowest of competitors’ prices.”

John Lewis reported that fashion, toys, gifts, Christmas trees, craft products and beauty ranges sold well during the week. Sewing machines sales were up 300 per cent in many branches, reflecting the trend for “craft-it-yourself” during the downturn.

John Lewis director of retail operations Patrick Lewis said: “The next three weeks’ trade will be crucial to the high street. We are confident that John Lewis’ strong and innovative Christmas products, services and price matching will ensure our continued position as a market leader.”