Friday, August 12, 2022

Dixons UK LFLs rise 8% over Xmas

Electricals retail group Dixons Retail has this morning reported an eight per cent rise in UK like-for-like (LFL) sales over the Christmas period thanks to impressive sales of tablets and a surge in sales of white goods following the collapse of Comet last year.

For the 12 weeks ended January 5th 2012, total sales in the core UK business grew seven per cent while the group also gained market share over the period.

Multichannel also fared well with total multichannel sales up five per cent while LFLs rose seven per cent, a performance applauded by Dixons CEO Sebastian James.

Commenting on the results, he said: “Our key multi-channel businesses delivered an encouragingly strong result during the Christmas period, particularly in the UK & Ireland and in Northern Europe.

“Customers continue to respond to our excellent range of products, compelling offers, seamless approach to multi-channel and improving service levels, and we continue to benefit from capacity exiting these markets.

“Tablet sales were phenomenal across our markets, which was good to see but which impacted overall headline margins somewhat.

“White goods were also strong, particularly in the UK.”

As electrical retailers continue to struggle in an increasingly multichannel market, lead retail consultant at analyst firm Conlumino Joseph Robinson believes that Dixons‘ performance is a welcome anomaly.

He said: “The recent exit from the UK electricals market of both Comet and Jessops has served to highlight the immense competitive pressures that physical operators are facing.

“The impact of a continued shift in spend towards the online channel is being compounded by more general weakness in consumer demand.

“Against this backdrop, the recent performance of Dixons is impressive, with the retailer benefitting from a proactive and clear strategy to maintain its relevance in this fast evolving competitive landscape.

“Dixons‘ recent performance, in contrast to its traditional key competitors, serves to highlight that a proactive response to evolving market dynamics has been, and will continue to be, essential in a fast moving retail landscape.

“Dixons is reaping the benefits from its focus on creating a more compelling proposition, while at the same time leveraging its competitive advantages in developing a strong multichannel story.

“However, while it will undoubtedly continue to benefit from being the last specialist standing in its sector, the demise of HMV this week reflects that this alone is no guarantee of long term security. “

In Northern Europe, total sales rose seven per cent over the festive season and 11 per cent LFL while its Southern European operations, which comprise Italy, Greece and Turkey reported a considerable loss.

Total sales dipped six per cent while LFL growth declined eight per cent though James noted that the Greek and Italian businesses trading ahead of weak markets and “managed profitability robustly”.

Group total sales increased two per cent as LFLs climbed three per cent though the group highlighted its ongoing restructure plans which will see its Pixmania operation – which reported a “disappointing” Christmas – improve its financial position in the long-term.

Discussing the group‘s strategy for 2013, James concluded: “In the year ahead, while we will manage our cost base cautiously, we see many opportunities to improve the overall performance of our Group through further developments in our service offer for customers, sharing best practice, controlling costs and focusing on multi-channel growth.”


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