Electronic retailer Dixons has bucked the depressing trend on the high street and unveiled positive trading results for the third quarter helped by the demise of rival Comet which reduced competition in the sector just before Christmas.
Along with "phenomenal" sales of tablet computers, Dixons, the owner of PC World and Curry's, beat market expectations to post increased profits in the three months to January.
In the week before Christmas Dixons sold an astonishing five tablets per second. The closure of Comet stroes helped Dixons achieve an "uplift" in sales of white goods in the final month of trading to boost its results.
Dixons chief executive Sebastian James said: "Once the Comet stores closed we did see a lot of customers coming across the street to us."
He described the demise of Comet, HMV, Jessops and now Blockbuster as "quite heartbreaking and put the success of Dixons down to how its stores and websites work well together.
The trading results are good news for many of the Comet employees taken on by Dixons temporarily as 500 of the 1,000 staff are to be kept on permanently.
With Comet going into administration, Dixons and other electrical retailers were able to increase their market share. UK like-for-like sales rose by eight per cent, smashing analysts expectations.
Dixons Group which trades out of Curry’s and PC World outlets reported an eight per cent increase in like-for-like sales in the UK and Ireland. Higher sales were helped by huge demand for tablet computers and by a 25 per cent increase in sales of large kitchen appliances.
Dixons said that more than a million tablet computers were sold in the UK and Ireland over the period, including five every second in the week before Christmas. The trend was led by Apple iPads, with strong demand also seen for Samsung Galaxy and Google Nexus models.
Speaking to Radio Four’s Today programme this morning, James said: "We're experiencing growth. We took on well over 1,000 Comet staff and now have 500 permanently with us.
"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."
He said that the impact of Comet’s closure were difficult to assess because for most of the trading period in question Comet was holding a fire sale and attempting to sell as much stock as possible, hindering rivals attempts to take market share.
Dixon’s announced a sales rise of eight per cent in UK and Ireland and up by 11 per cent in northern Europe. However, like-for-like sales in southern Europe that includes the struggling economies of Greece, Portugal, Italy and Spain fell by eight per cent.
Ross Bailey, director of the pop-up store consultancy Appear Here said: “Even as their rivals Comet finally gave up the ghost, Dixons performed well over Christmas, boosting like-for-like UK sales by 8%.
“While mainstream electronics retailers will always struggle to beat the online-only outfits on cost alone, they can still leverage people’s desire to see and touch expensive items before they buy them.
“Done right, the physical store experience is more important than ever – it’s not enough to fill a warehouse with gadgets and hope for the best. Dixons has worked hard to improve its reputation for service and this has paid dividends.
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