John Lewis recorded a 10% week-on-week rise in sales in the last seven days, helping the firm shrug off overall profits being down 13%.
The chain blamed low consumer confidence following both Woolworths and MFI going into administration for the poor sales.
But the VAT cut, from 17.5% to 15%, which many retailers, including John Lewis, implemented last week combined with Christmas shoppers starting to spend gave the firm a much needed boost.
As the VAT cut, which officially starts today, led to branches picking up significantly towards the end of the week.
Sales finished for the week at -13% but both Christmas trees and craft products were big sellers.
The firm said branches were reporting a trend for 'craft it yourself' with sales of sewing machines up more than 300% in many branches.
Patrick Lewis, director of retail operations said: 'The next three weeks' trade will be crucial to the high street.
"We are confident John Lewis' strong and innovative Christmas products, services and price matching will ensure our continued position as a market leader.'