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DERMOT MURNAGHAN: Now then, in an economic crisis, consumer confidence is key so with Christmas just around the corner how is the retail sector doing, all important of course. I am joined now by the Managing Director of John Lewis, Andy Street, a very good morning to you Mr Street, live there as I can see in one of the stores in Solihull, how is it going?

ANDY STREET: Yes, well we’re doing very nicely thank you as we come up to Christmas. I am in Solihull, we have had an all-time record week of sales here but more importantly, last week we had an all-time record week for sales across the country, 15% ahead of the same week last year.

DM: Wow, that is quite an improvement, what do you put it down to?

AS: Well we’re satisfied with that. The peak week really should still be to come next week, so we’re not being complacent in any way but probably it comes down to one word and that word would be trust. Customers do seem to really be trusting John Lewis this Christmas, and what do I mean by that? First of all trust in our pricing, so our never knowingly undersold commitment but perhaps more importantly in these tough times, trust that we will be here for the long term and that we will do the right thing in terms of any after-sales care issues.

DM: Beyond that, you mentioned trust, do you think it also applies to the fact that you are UK based and they can trust you to pay your dues when you have to?

AS: Well that’s a very interesting observation, Dermot. I can’t prove that but certainly if we look at our online trade, the last three weeks have been really dramatic the increases there, about 40% year on year and all I can say is that does coincide with the observations about paying corporation tax and I think our customers expect John Lewis to be a responsible business in every sense of that, to be a good citizen and that extends from the conditions in the supply chain, through to paying the right amount of corporation tax and it was for that reason that I was happy to be the first business to just observe that others should consider their positions when we kicked that debate off about three weeks ago.

DM: It’s interesting you are so strong about that because of course there could be issues, and I’m sure some of them are to do with perhaps your online offering has got better, perhaps more people have got hand-held apps and smart phones so they can do their shopping, other things could have changed, but you do feel that that whole debate about how much multinationals and internet companies pay in this country has had an effect?

AS: I can’t prove it, but it definitely has been good, I’d call it background publicity for us. But you of course are right, fundamentally this is about whether our online operation and our shops are working hand in glove in the run up to Christmas so if you come back to your first question about why are we doing well, I do think it is because the bricks and clicks part of our operations are perfectly ed so what we see are customers coming into our shops, doing their browsing, getting their ideas and then going home and placing their orders and indeed placing their orders at home and then coming into the shops to pick up goods. So we have really we think got on to the front foot in this omni channel race, as we call it.

DM: Okay, use your crystal ball for me. After the Autumn Statement when we were told that the gloom and doom will go on for many years to come, consumers have got to feel at the very least fragile. Do you think they are just digging in to the pockets for Christmas and come the New Year will say right, we’ll batten down the hatches?

AS: Well we have to be careful about reading the John Lewis numbers for the national numbers. We think the national numbers are just slightly positive which is actually fine because we can actually plan if you know that. What we don’t want is any big shocks that take the numbers negative and we’re planning next year for continued small growth. The reason I say that is obviously inflation is coming down at the same time as pay rises are reasonable, so for the first time customers have actually got just that little bit more money in their pockets and there was data to confirm that earlier this week. So small growth is our prediction for next year.

DM: And just finally Mr Street, share with me – I don't know if you have had any discussions with government but it is much discussed, isn’t it, when it comes to our whole kind of corporate structure, that the John Lewis model – and you must hear it bandied around now by so many politicians, saying how much they admire the relationships you have with your staff and the amount of profits that they get to share. Are you having those discussions with government, are you helping them form policy on how this could be applied to other companies?

AS: Yes, I’m pleased to say we are both for the public sector and the private sector, so not just John Lewis, there is an organisation called the Employee Ownership Association and that’s been particularly active with government through something that we call the Nuttall Review which has given recommendations to government about how our model, if not copied, could at least be influential in bringing employee ownership more widely in the economy. So yes, we’re optimistic and we’re told that the budget in the New Year may give some specific news on this, so certainly there is an active dialogue going on.

DM: Like paying your fair share of tax in this country, do you believe it is partly a moral issue, about sharing the profits with your employees, paying the right about of tax, this is about morality more than anything else?

AS: Yes, it is, certainly the paying tax is about morality. It is also, in terms of our model, it’s about a better way of doing business. The thing that gets John Lewis leaders out of bed in the morning is proving that we are actually running a different type of business that can compete and that can out-perform our competitors. It isn’t about a softer business model, it’s about a better business model and going back to where we started, just at the moment it looks as though our customers are saying yes, there is something special about the John Lewis model and we actually want to be part of that. So that’s the driving force for John Lewis partners in the run up to Christmas.

DM: Okay, Mr Street, thank you very much indeed, very good to talk to you. Andy Street there, the managing director of John Lewis there in Solihull.