A shift to 24-month phone contracts in the UK has been blamed for a 3.3 per cent year-on-year decline in like-for-like (LFL) sales at Carphone Warehouse (CPW) Europe during the company’s first quarter.
In an interim management statement for the three months to the end of June, published today, the mobile phone retailer said that it remains confident about performance for the remainder of the year and that its sales in other European markets remain positive.
Best Buy Europe, the joint venture between CPW and US electricals retailer Best Buy, also continued to see sales drop, with trading falling 4.8 per cent to £756 million compared to £794 million in Q1 2010.
A new strategy for Best Buy UK, which comprises ten ‘big box’ stores in retail parks across Britain, has yet to be announced despite the company originally planning to quickly roll out around 80 outlets nationwide.
CPW CEO Roger Taylor said in June that the group was in the process of evaluating the next steps for its Best Buy UK operation in light of multimillion pound losses, but no decision has been made and the market will be updated “in due course”.
Commenting today, he added: “We continue to evaluate the next steps in our multi-format/multichannel consumer electronics strategy.
“Our first quarter trading is very much in line with our expectations and means we can reaffirm the financial guidance given for the full year to March 2012.
“In the UK, as expected, the shift to 24-month contracts, and a continuing weak prepay market, affected Carphone Warehouse sales, but we saw an encouraging performance from continental Europe, as we continued to drive smartphone penetration across the CPW Europe estate.”
Best Buy Mobile US Q1 connections were up 12.3 per cent to 1.6 million, while LFL sales growth for the three months to the end of May increased 28 per cent, driven by strong postpay sales.
Virgin Mobile France delivered strong net customer additions of 68,000 for the quarter and revenue growth of 16.4 per cent.
CPW also unveiled a new business-to-business service earlier this month, and this format could be rolled out in stores nationwide if the current trial is successful.
“Altogether, a very satisfactory start to the year,” Taylor added.