Electricals chain sold five tablet computers a second before Christmas as competitor’s collapse boosts sales
Dixons Retail, the owner of Currys and PC World, sold five tablet computers every second in the run-up to Christmas as the electricals chain and Argos owner Home Retail Group benefited from consumers’ seemingly insatiable appetite for gadgets and the demise of rival Comet.
Dixons, the last major electricals chain on UK high streets, said it sold more than 1m tablets, such as iPads, and Google’s Nexus, in the three months to January, about three times more than in the same period a year before. Sebastian James, chief executive, said shoppers snapped up five tablet computers a second on the weekend before Christmas.
Terry Duddy, chief executive of Home Retail Group, said Argos had a better than expected festive season with its strongest quarterly sales growth for five years as tablet sales soared more than 50%. “Christmas was absolutely about technology. People were buying lots of tablets and e-readers and using tablets and smart phones to buy other gifts,” he said.
Argos enjoyed a 2.7% rise in underlying sales in the 18 weeks to January. Duddy said the chain benefited from less competition from supermarkets, which focused on food over Christmas, and was likely to have picked up some sales from rival Comet which collapsed in December.
Dixons also recorded a hefty 25% rise in sales of large kitchen appliances. James said: “Once the Comet stores closed we did see a lot of customers coming across the street to us.”
He described the recent collapse of Comet, Jessops, the camera retailer, HMV, the entertainment store, and Blockbuster, the film rental chain, as part of “quite seismic” changes on the high street: “It is quite heartbreaking to see all those great brands disappearing from the high street.”
James said Dixons was surviving because it was making its website and stores work together. Shoppers needed help to understand complex products such as smart TVs. He said gadget makers were keen to offer Dixons exclusive products that could help it could compete with rivals such as Amazon because it could use its stores to show them off to full advantage.
However, the strong UK performance was offset by problems abroad. Underlying sales for the group rose 3% after a dismal performance from Dixon’s online camera store Pixmania, whose sales fell by a quarter, and drop 8% at its chains in Greece, Italy and Turkey. Lower profits on tablets compared to laptops also meant analysts did not lift profits forecasts.
James also admitted tablets sales had slowed after Christmas as shoppers switched back to buying laptops. He hinted that UK growth may not keep up the same pace this year.
Duddy is also anticipating another difficult year as the UK economy continues to struggle although he hopes to pick up more camera sales from Jessops which collapsed this month.