Thursday, January 17, 2013
DIXONS Retail, owner of PC World and Currys, today reported a bigger than expected surge in Christmas sales following the demise of rival Comet.
And rival Home Retail Group said consumer electronics had also contributed to strong seasonal sales for its Argo catalogue business, in an early sign of success for its new digital strategy, although sales it its Homebase DIY and garden centres chain continued to suffer.
Dixons said its like-for-like sales in the UK and Ireland were up 8% in the 12 weeks to January 5, despite the administrators of Comet holding a clearance sale for the vast bulk of the period.
The group said sales of tablet computers were “phenomenal”, with more than a million sold in the UK and Ireland over the period, with five a second in the week before Christmas.
Apple iPads made up a third of tablet sales, but it also had strong demand for the Samsung Galaxy and Google Nexus models.
Chief executive Sebastian James believed the group gained many new customers from Comet, prompting it to take on 500 permanent staff from the failed chain.
More than 1,000 of its temporary Christmas staff came from Comet after it went into administration in November.
Dixons warned that margins were down 0.5% in the period, with the mark-up on tablet computers lower than on laptops, but it said it still expected underlying profits for the year to be in line with market expectations of between £75million and £85m.
Meanwhile, Home Retail Group said internet sales had accounted for 42% of all Argos business as more shoppers took advantage of the chain’s new tablet and smartphone apps, as well as click and collect services.
Argos sales rose 2.7% on a like-for-like basis in the 18 weeks to January 5, meaning Home Retail’s profits for the year to March would be £10m ahead of current City forecasts of £73m.
The Argos business, which sells products in 739 stores as well as online and through a television channel, took a total of £1.74billion over the 18 week period, a rise of 1.6% when store closures are accounted for.
Consumer electronics, particularly tablet computers, drove the improvement, while there was also growth in white goods, toys and core electricals. This was offset by weaker trading in homewares and jewellery categories.
Home Retail announced plans in October to scale back circulation of its catalogue and revitalise the business through its digital presence.
Stores will be kitted out with internet access and Wi-Fi, with a fast-track collection service and customer service for orders.
Home Retail hopes to grow Argos sales from £3.9 billion to £4.5 billion a year in 2018 in an “ambitious but achievable” overhaul that comes after a period of declining sales.
Matt Piner of retail consultancy Conlumino said the figures showed the popularity of “click & collect” shopping over Christmas.
He added: “Downsizing its store portfolio to provide an optimum network of click & collect hubs will now be crucial if the retailer is to build on this performance.”
Home Retail’s Homebase division, which has 337 stores, saw total sales decline by 4.5% to £453m, including a fall of 3.9% on a like-for-like basis.