// Currys CEO Alex Baldock admits customers are spending less and trading down when it comes to electricals
// Shoppers are also increasingly turning to credit to afford big tech purchases
Currys boss Alex Baldock admitted that Christmas trading is a “mixed picture” as shoppers are spending less, however, they are prepared to trade up for energy-saving products.
The electricals boss said: “Customers are obviously hard-pressed and they’re spending less. They are trading down for sure, and have an eye for a deal, as we saw around Black Friday.
“We have seen some trading up to items when they are more energy efficient,” he added, citing A rated washing machines and air fryers as examples of items in demand.
It emerged last week that Currys had temporarily ditched Royal Mail as a delivery provider in light of the pre-Christmas strikes.
Baldock said it had worked hard to ensure postal strikes would not impact its customers and said shoppers could order up until 22 December and receive items before Christmas.
Currys shoppers turn to credit
Currys shoppers are increasingly turning to credit to finance big electricals purchases as they “look for help” to either afford or make the items they have last longer, Baldock said.
Some 17% of Currys sales now made using credit, an offer that the CEO put at the centre of his strategy when he joined the business in late 2018.
He said that credit penetration had far exceeded its target of accounting for 16% of sales by the end of 2023/24.
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Baldock also highlighted Currys sizable repair business as being critical to customers with squeezed budgets right now.
Currys sounded a profit warning this morning as it plunged to a half-year loss. The retailer crashed to an adjusted pre-tax loss of £17 million as group like-for-likes plunged 8%.
However, its UK business had remained resilient with adjusted EBIT up 25% to £25 million with its international arm dragging down profitability.
Adjusted EBIT plummeted 94% to £4 million overseas, where it had suffered due to what Baldock termed the “desperate” discounting of competitors.
The electricals boss said it was being “prudent and cautious” with planning for the year ahead. However, he did hint that things could get better in the UK in 2023.
“UK inflationary pressure has peaked. Interest rates may be near peak. The UK consumer is still sitting on a lot of savings. A year from now, things could look brighter,” Baldock added.
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