The Dixons Carphone group had a mixed Christmas, with its electricals division returning to growth whilst its mobile business continued to contract sharply.
Over 10 weeks to 4 January, like-for-like sales in its UK & Ireland electricals division rose 2% against no growth in its last half year period. Performance was driven by demand for TVs, gaming products, smart tech and small domestic appliances.
The group said that its Currys PC World chain was continuing to make share gains in a slowing market. Its online growth was 7%.
Growth in Dixons Carphone’s international electricals unit was also better than expected, with like-for-like revenues up 3% (Nordics +3%, Greece +6%).
However, as predicted by analysts and the company’s own management, like-for-like revenue in the UK mobile business fell by 9%. The business has suffered in recent times from consumers upgrading their phones less often and increasingly buying handsets outright rather than signing up to long-term contracts.
Alex Baldock, Group Chief Executive said: “We’ve had a good Peak in a weak UK market and we’re on track to deliver what we promised for this year, and with our longer-term transformation.”
He pointed to strategic initiatives that had delivered encouraging results: “Credit and services adoption rates increased, online sales grew strongly, and our newly remodelled stores performed well.
“Coupled with our unambiguous ‘You won’t get it cheaper. Full stop’ price promise, alongside better availability and delivery, this led to big improvements in customer satisfaction and strong market share gains in Electricals.”
Commenting on the trading update, Richard Lim, CEO of consultancy Retail Economics said: “Their price promise to match any retailer, online or in-store, resonated well with constantly connected shoppers who readily browse their smartphones in-store to checkout online offers. Assurances on price are particularly important in an extremely competitive sector where the nature of the product makes it difficult to differentiate from online competitors.
“Wider structural changes in the mobile market continued to undermine growth as consumers opted for SIM-only deals while hanging on to their handset for longer. A sharp drop in sales was widely expected but remains a challenge for the retailer as they continue to reshape the business and offer a more connected in-store experience.
“Looking forward, the Euros, Olympics and a new generation of computer consoles will help support sales growth this year.”
