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Dixons Carphone focuses investment on the customer experience

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Dixons Carphone today said that it would focus on the customer experience as it looks to improve its financial performance.

Incoming chief executive Alex Baldock, previously of Shop Direct, said that after eight weeks in the Dixons Carphone business he was optimistic about its long-term prospects and impressed by the breadth and depth of its multichannel capabilities. But, he said, despite leading in each of its markets, nobody was happy with the business’ current performance, as it reported international growth but a decline in UK sales, and predicted that profits would fall in the current financial year.

The focus, he said, now needed to be on the customer experience, and on the UK business, where in the coming year it will invest around £30m “giving our colleagues the right tools and the customer an improved experience”. The business includes Currys PC World, a Leading business in IRUK Top500 research, and Carphone Warehouse, a Top50 retailer.

“We’re working at pace to bring clear long-term direction to the business,” he said. “We will give our customers what they value while making the most of our many strengths. We will address underinvestment in important areas of the colleague and customer experience. We will sharpen our focus on the core business and on fewer, bigger initiatives. We will bring this business closer together, the better to give customers the full benefit of everything we have to offer them, and to deliver that through a truly integrated business – it is not today.”

He said Dixons Carphone was already focusing on areas such as data, analytics, marketing, digital, services and technology. It is also working to improve profitability in electricals and to stabilise its position in mobile. 

The update came as Dixons Carphone reported, in a trading statement, a 3% rise in group revenues in the year to April 28 2018, with like-for-like sales up by 4%. That growth was largely led by its International business, with marked improvements in its Nordic (+10%) and Greek (+18%) markets. UK sales, however, were down by 1%. It said that it expected to deliver a full-year pre-tax profit of £382m in the financial year that has just finished, but that in the current financial year the figure would be closer to £300m.

Looking ahead to the current financial year, Dixons Carphone said it expected its international businesses to build on positions of market leadership. But it expected a contraction in the UK electricals market, during which it aims to use its scale to maintain market share. Cost increases are expected in UK electricals, following the introduction of the National Living Wage and depreciation of IT systems. In mobile it would continue to work with networks to improve its business model and is planning to close 92 Carphone Warehouse standalone stores this year as part of its strategy of multi-brand stores, where Carphone Warehouse sits alongside Currys PC World stores.

Image courtesy of Dixons Carphone

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