Like-for-like (LFL) sales at electricals retail group Dixons Retail fell two per cent over its full-year period, results released today revealed.
Over the last 28 weeks of its 52-week year ending April 30th 2011, trading was even weaker, declining four per cent LFL compared to last year, but despite tough market conditions the company continues to implement its ‘Renewal & Transformation’ plan.
Around £50 million in cost savings were delivered by the owner of PC World and Curry’s during the 12 months and underlying group profit-before-tax should be in line with previous expectations.
John Browett, CEO of Dixons, commented: “Market conditions have been challenging in many of our markets this year.
“Having made further good progress on the Renewal & Transformation plan, we continue to deliver significant improvements for our customers, notably this year through the launch of our service brand Knowhow, but also through our improved shopping trip and refitting of stores, particularly in the UK.”
Business in the UK & Ireland has been particularly weak, with LFL trading dropping seven per cent in the second half and three per cent over the year, whilst the best performing region was once again the Nordics countries.
Overall international sales reduced five per cent year-on-year on a LFL basis over the 52 weeks but Nordic LFL trading actually rose five per cent in the same period.
Browett continued: “Our businesses have responded to our customers needs enabling them to improve their market positions, particularly in the UK, Nordics, Greece and Italy. Our focus on value, choice and particularly on service has been at the heart of this delivery.”
Rivals in the electricals sector Comet, yesterday reported a huge 15.2 per cent LFL decline in sales during the four months to April 30th, showing just how difficult this market has become since the start of the year.
Dixons pure play e-commerce sales receded nine per cent over the 12 months to May as the retailer shifts emphasis to multichannel trading, which saw a 12 per cent jump year-on-year.
The company now has 60 megastores open with annual sales of £20 million, whilst new format outlets continue to deliver consistent gross profit uplift across the group.
Full-year profit before tax for Dixons is expected to reach £85 million, as previously expected, while net debt will be approximately £220 million.
“With challenging economic headwinds continuing for many of our customers, we remain cautious on the outlook for the year ahead,” Browett added.
“Having had a strong World Cup performance as well as the exclusivity of the iPad last year, we have tough comparables ahead.
“However, through our Renewal & Transformation plans, our businesses are well placed to emerge from the current weak consumer environments ahead of our competitors.”