UK's John Lewis winning in challenging market, boss says

* John Lewis outperforming overall UK market

* Well set up for key trading period

By James Davey

OXFORD, England Oct 20 (Reuters) - John Lewis , Britain's largest department store operator, is outperforming a challenging market as it approaches the key Christmas trading period, its boss said on Friday.

British consumers' discretionary spending is under pressure from rising inflation, subdued wage growth and ongoing uncertainty in the UK economy.

"Consumer confidence is in quite a challenged place ... It is not a market for the faint-hearted at the moment," said Paula Nickolds, the company's managing director. "But I think we are really well-placed and believe we are outperforming."

Speaking at a media preview tour of John Lewis' new Oxford location, the chain's 49th store, Nickolds said official UK retail sales data for October would look "pretty grim". UK retail sales volumes fell 0.8 percent in September, worse than economists expected.

"We believe we're trading about a couple of (percentage) points higher than the market," she said.

John Lewis said on Tuesday its sales rose 2.7 percent in the 11 weeks to Oct (Shenzhen: 000069.SZ - news) . 14, which analysts estimated equated to a like-for-like rise of about 1.5 percent.

John Lewis typically makes more than 40 percent of its annual profit in the five weeks until Christmas. Nickolds said the company was "really well set up" for that period.

Nickolds, a John Lewis veteran and the first woman to run the 152-year-old, employee-owned chain, succeeded Andy Street as managing director in January.

"In my 25 years in retail I've never seen the pace of change and the level of transformation and disruption that we're experiencing at the moment," she said.

She (Munich: SOQ.MU - news) is increasingly focusing on adding more experiences and services to John Lewis stores. The Oxford store, which opens on Tuesday, devotes a fifth of its 120,000 square feet of floorspace to services and experiences, ranging from travel advice to eye tests and children's car-fitting advice.

John Lewis has invested 18 million pounds ($24 million) in the store.

Nickolds also added her voice to business leaders' calls for clarity over Britain's exit from the European Union in 2019.

"I would like us to have clarity because it would definitely help us to plan," she said.

"We are preparing for every eventuality. It's not clear what 'no deal' really means any more than it's clear what a deal might mean."

($1 = 0.7583 pounds) (Editing by Larry King)