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John Lewis sales lifted by British Olympic gold rush
by Rhys Jones
Reuters Translate This Article
17 August 2012
LONDON (Reuters) - John Lewis, Britain's biggest department store group, posted strong sales growth last week, helped by a feel good factor that swept the nation during the second week of the London Olympic Games.
The employee-owned firm said on Friday department store sales jumped 14.9 percent year on year to 60.75 million pounds ($99 million) in the week to August 11, as consumers drew confidence to shop from Britain's haul of gold medals in the second week of the London Games.
'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.
John Lewis, 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 Britain's 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.
'A second strong week undoubtedly helped by the Olympics ... it was a London story, though, with Oxford Street sales up 18.9 percent and we suspect Stratford had a fantastic week given the sales numbers Westfield reported,' said Seymour Pierce retail analyst Kate Calvert, who added that the London riots, which happened in the same week a year ago, likely helped year-on-year sales growth.
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.
British 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.
(Editing by Sarah Young)
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