Dixons Retail Outstrips Rivals Despite Sales Fall As Demand Remains High For Kindle And iPad
Currys and PC World owner Dixons Retail said it had outperformed its struggling rivals, despite further sales woe over the Christmas period.
The group, which has 640 stores in the UK and Ireland, reported a 7% fall in like-for-like sales in the 12 weeks to 7 January, even though it was helped by a doubling in sales of iPads and Kindle devices.
Shares opened 10% higher as the update was better than the City's worst fears and included a 23% rise in trading between 4 January and 14 January after its sales period was boosted by weak comparisons with the previous year.
Chief executive John Browett described the group's performance as "solid" and said it had outperformed rivals Comet, which was recently sold by parent Kesa Electricals for £2, and Best Buy, which has just thrown in the towel in the UK.
He said he was not able to give market share figures but added: "We are ahead of the market and you can see it in some of our competitors' numbers."
The electronics market has taken a massive knock from the squeeze in consumer spending in recent months, with retailers forced to put on a flurry of discounts.
Dixons said it had outperformed rivals with the help of strong online trading, demand for its click and collect service and its new Knowhow offering which sees it offer expertise to help customers install new technology.
Mr Browett said the group's product margin had been eroded in the period as it competed harder on price.
But the group's overall margins improved over the period as it made cost savings and was helped by its higher margin Knowhow offering.
He said the sales losses came as Dixons was forced to "weather" Best Buy's closing down sale over the past six weeks, although he said he believes Comet has "had a very difficult time of it" over the period.
But he added that many shoppers had waited until the January sales to buy products, but said this had only helped it gain share.
Dixons said shoppers were still coming to it for new technology such as 3D televisions and e-book readers despite the squeeze in spending. Sales of headphones and coffee machines were also strong.
The group reported more strong growth in its Nordics region, but further sales declines in southern Europe. Across the group, like-for-like sales were 5% lower.
Freddie George, an analyst at Seymour Pierce, said Dixons is the "last man standing" and believes the company will benefit when consumer confidence returns.