Wet weather boosts DVD sales at UK's Woolworths

British retailer Woolworths saw sales rise more than expected in June and last month after Britons snapped up its DVDs and sweets as they saught entertainment indoors to escape weeks of rain and flooding.

Woolworths, one of Britain's most recognised high street names with more than 800 stores, said yesterday its like-for-sales rose 3.7 per cent in the eight weeks to last Saturday.

Britain's wettest summer since records began had a "beneficial impact", said Numis analyst Ramona Tipnis, who has a "reduce" on the stock. "This is a stronger-than-expected statement", she wrote. "Because of the weather, we've seen a positive uptick on confectionery and entertainment and a downtick on items like outdoor toys and garden products," chief executive officer Trevor Bish-Jones said.

Woolworth's didn't have a "mountain of stock" of outdoor furniture to clear after cancelling early orders, he added.

Mr Bish-Jones said he was cautious about the retail environment going forward with another interest rate expected, after four in the past year.

"We remain focused on running the business tightly, concentrating on cash generation, control of costs and improving margins," he said. However, he said Woolworths was reaping the benefit of its multichannel offer, where shoppers can buy online, instore or via catalogue, and better-than-expected sales of a range of nearly 500 discount products launched last month.

Sales penetration of the "Worth It" range, aimed at taking on supermarket discounters Tesco and Asda with, for example, wine gums at 29 pence a bag and toasters at £5, was running at three to four per cent of total sales, higher than forecast.

Catering to Britons' shrinking spending power, a further 200 entry-level products will be launched by next month together with an external advertising campaign.

"It's not taking Woolworths downmarket. We've made a way of grouping together entry level products," Mr Bish-Jones said.

Seymour Pierce analyst Andrew Wade called it "a good performance" across the group while highlighting the core retail division performed against weak comparatives last year when the soccer World Cup and hot weather dampened business.