// Currys CEO Alex Baldock says it is “passing more of the cost increases on to consumers”, which has boosted margin
// The retailer has also introduced delivery charges on major appliances and TVs
Currys boss Alex Baldock said its aggressive self-help measures, including raising prices and charging for delivery, have helped to preserve its margin.
Baldock said the electricals retailer is now “passing more of the cost increases on to consumers”.
“We’re leading more boldly on price rises, and we’re charging for services more now as well,” he said. “We’re doing fewer promotions – the promotional intensity significantly declined – and we’re especially doing none of the less profitable ones.”
Baldock said the retailer’s margin had also benefitted from its decision to charge for deliveries of major appliances in peak. It has also introduced a fee for large-screen TV delivery.
Currys has managed to add it more than £10 per order due to installation and recycling services, Baldock revealed.
The improved margin has helped offset the performance of the retailer’s Nordic business, where sales have been hammered due to the heavy discounting by rivals.
Despite unveiling a half-year loss in December, the retailer is confident of hitting its £100m to £125m full-year profit guidance, which it downgraded last month.
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Currys reported group’s like-for-like sales dropped 6% in the 10 weeks to 7 January driven by a 7% slump in its international business.
Sales in the Nordics plummeted 10%, compared to a 5% drop in the UK and Ireland.
Baldock also said that Currys has stopped “chasing unprofitable sales”. The retailer has ditched loss-making lines and has a better understanding of “end to end profitability” of products, which he said was helping to influence supplier negotiations.
As part of its cost-cutting measures, the electricals specialist has also slashed marketing budgets, closed some unprofitable stores and reduced back office headcount by 10% to 15% in the Nordics.
In terms of trading, Baldock revealed that the electrical retailer had benefited consumers seeking out energy efficient appliances, which he said often led them to buy higher-priced products.
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