DEPARTMENT store group John Lewis said it was confident of stemming its profit fall this year after strong first-half sales.

Profits across the business, which owns the Bainbridge department store in Newcastle and Waitrose supermarket chain, have fallen for the past three years amid challenging high street competition.

But chairman Sir Stuart Hampson said the partnership now had a fair chance of matching last year's £150m figure this time round.

Sales at John Lewis's department stores were up seven per cent in the six months to July 28 compared with the same period last year and by 13 per cent at Waitrose.

Sir Stuart said he was particularly encouraged by the performance of the 26 department stores as price deflation meant "growth had been hard to come by".

Pre-tax profit rose 15 per cent to £44.1m while group turnover jumped to £2.09bn, an increase of close to £200m.

The rise in profits at the half year stage is good news for the staff at the company, who are all partners in the business and share in any full year profits rise in the form of a ten per cent bonus, equivalent to around five weeks wages.

Sir Stuart said consumer confidence seemed to be holding up in face of the gloom in the global economy, with group sales up seven per cent in recent weeks.

He added, however, there were question marks hanging over the second-half, particularly after the "catastrophic events" in the US.

"We have had a long run of favourable trading conditions, with consumer confidence reflected in the housing market," he said.

"I sense that much of that confidence remains, but the Bank of England's action in cutting interest rates in August must already have reflected concern about the economy and the impact here of global trends. And the unprecedented catastrophe in New York and Washington now makes the next few months even harder to read."

John Lewis will face e-commerce development costs of £30m in its full-year results, reflecting two initiatives.

A department store site, johnlewis.com, will be launched next month while the group is also investing in a grocery home-shopping venture Ocado.

The site, backed by Waitrose, launches later this year when the first trial deliveries to homes will be made.