One of the minor miracles in UK retailing this year has been the astonishing performance of electricals sales in John Lewis department stores, with growth of 32% over the last 20 weeks.

One of the minor miracles in UK retailing this year has been the astonishing performance of electricals sales in John Lewis department stores, with growth of 32% over the last 20 weeks.

Is John Lewis living in some parallel universe, where everything is turned on its head? Or is John Lewis still operating in the same electrical market that Argos and Dixons have been saying is still quite tough?

If John Lewis is still the great bellwether of retail that it used to be, then its amazing sales growth in electricals is telling us something about consumer confidence in big-ticket spending, but maybe something has changed…

At least things are a little bit clearer after the trading updates from its rivals Argos and Dixons this week. For the 13 weeks to June 2, electrical sales at Argos were flat like-for-like on last year, which for a struggling business like that is quite an achievement, reflecting the lift from the booming tablet PC market. But Argos said that the TV, audio and video games markets remain “challenging”.

Dixons didn’t give a precise trading update with its final results yesterday, but said that the new-year had seen “a good start”, with UK sales growth “broadly equal” to the 8% growth seen in their final quarter to the end of April.

There is still a big difference between 8% growth and 32% growth, let alone 0% and 32%, but at least Argos and Dixons have seen some sort of lift to their figures in recent months, to reflect some of the boost that John Lewis is enjoying.

Of course, that 32% growth at John Lewis isn’t quite comparable. It includes new store space, but even if like-for-like growth is nearer 28% it is still an extraordinary outperformance versus the market.

And although John Lewis is much less exposed to the video games category than poor old Argos, “electrical” market definitions don’t explain away the gap.

When John Lewis electricals sales growth really began to accelerate through March and April, it looked as if it was just the digital switchover in London bringing forward a lot of TV sales and that sales would quieten down through the summer. But John Lewis has continued to see boom-like conditions in electricals in recent weeks.

Of course the bad summer weather has helped ‘indoor” products such as  electricals and Euro 2012 will have helped sell a few more TV sets, but the bad weather can’t be responsible for all that 32% sales growth.

Back in 2007, when the summer weather was last this bad, John Lewis wasn’t blowing away the competition with its electricals sales growth, albeit the comps were quite tough versus the 2006 World Cup effect the previous year.

Do you remember the summer of 2007? The weather ruined Wimbledon  but at least the credit crunch was a reasonably distant spot on the horizon. Jump forward from 2007 to 2012 and the pressures on the housing market are manifold, even with record low interest rates, but the fact is that John Lewis is doing well selling anything electrical.

In fact anything with a plug on at John Lewis is walking out the door, or more precisely being shipped out of the door of the John Lewis Online warehouse into a delivery van.

Something that has changed since 2007 is the scale of John Lewis’s online operation, and it is not a coincidence that John sales are up by an incredible 45% in the same period as the 32% growth in electricals sales, because a lot of those online sales are Electricals.

TV and tablet PC sales are obviously strong at John Lewis, but so are white goods and so are small appliances and so are mobile phones. The success and efficiency of John Lewis Online partly explains why the electricals business is doing so well across the board, and yet even John Lewis’s famously middle-class customers have other options when it comes to ordering online.

But it appears that as the electrical market becomes ever more complicated and products become ever more inter-connected more and more customers are turning to John Lewis’s renowned staff and service to get the job done.

When Best Buy got into bed with Carphone Warehouse in May 2008 it saw a big gap in the UK electricals market for a quality operator, but the last four years have seen seismic shifts in the market.

Apple has rapidly emerged as a huge player in its own right, with its retail sales approaching £1bn this year. Dixons was galvanised into its transformation strategy by the perceived threat from the ill-fated Best Buy. Amazon has eaten much of Argos’s lunch.  And John Lewis grew quickly to fill the gap in the quality end of market.

How much money John Lewis is actually making out of its sales boom in electricals is another matter, such are the gross margins in this market, but that’s a story for another day.

About Nick Bubb

Nick Bubb has been a leading retailing analyst for over 30 years. He is a well-known commentator on UK retailing and is a founder member of the influential KPMG/Ipsos “Retail Think-Tank”.