John Lewis, the employee-owned store chain seen as a barometer of Britain's retail sector, said yesterday latest weekly sales at its department stores fell 4.2 per cent compared to last year.

The firm said the drop reflected the distraction to shoppers of the Beijing Olympics and summer school examination results together with tougher comparative numbers from a year ago.

Sales in the week to August 16 at its 26 department stores fell to £47.2 million - the 10th week out of 15 that sales have fallen as UK shoppers have cut back on spending due to higher fuel, food and mortgage costs.

Many retailers are struggling as consumers curb spending. Sellers of high priced goods are suffering more than most, with fewer people moving home and house prices falling sharply. Analysts estimated the fall on a like-for-like basis, which strips out the impact of new space, to be about seven per cent. The subdued performance was driven by a 9.4 per cent fall in sales in the home category and a 5.3 per cent decline in electrical goods and home technology.

At the group's chain of 189 Waitrose supermarkets, sales increased 2.3 per cent to £72.4 million but were negative on a like-for-like basis, despite high food price inflation.

Total John Lewis Partnership sales fell 0.3 per cent to £119.6 million.