John Lewis sales return to double digit growth
The 2nd week of the Olympic Games played a part in the group's success, the company says
By CFOWorld staff | CFO UK | Published 10:00, 17 August 12
Sales growth at John Lewis was boosted by the Olympic spirit last week as sales returned to double digit growth as British Olympians notched up gold medals, the group said on Friday.
The UK’s largest department store said on Friday store sales rose 14.9 percent year on year to £60.75 million in the week to 11 August.
"The final week of the London 2012 Olympic Games and the weekend celebrations certainly played a part in our success," the company said, noting that sales of sports merchandise almost trebled during the week.
"There was certainly a mood of celebration as the 'Mobot' (British athlete Mo Farah's signature pose) went global and we toasted our sporting heroes ... champagne sales saw a 35 percent uplift on the same time last year."
John Lewis, the official department store provider to the London Games, said sales in its electricals and home technology category increased 22.2 percent, with telecoms equipment selling especially well. Fashion sales rose 18.9 percent, while sales in the home category were up 7 percent.
The employee-owned store, which has a bias to the south east of England, has set the pace in the sector this summer, outperforming rivals as wet weather has driven footfall from the high street to the covered shopping malls where its stores are often located. Unseasonally cold weather is also favourable for its key household goods business.
The retailer has also been outperforming the wider market because its generally more affluent customers have been less impacted by the economic downturn, while improvements to product and service and new modern stores have chimed with consumers.
However, John Lewis' numbers are flattered by the fact it has more shops than last year and by higher prices because of inflation. Also electrical items, which have sold well this year, tend to have relatively low profit margins.
John Lewis also owns upmarket supermarket chain Waitrose, where week to August 11 sales rose 12 percent to 107.56 million pounds.
It noted patriotic pride at the success of Team GB saw a surge in sales of home-grown groceries.
Retail sales grew unexpectedly in July and were stronger than first thought in June, boosting chances that consumer spending will help lift the economy out of recession, the UK's Office for National Statistics said on Thursday.
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