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Dixons Carphone sees sales and profits fall, but digital strategy “is right”

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Dixons Carphone says that its digital transformation process is working and has coped with recent market stresses, with online in-store sales rising 64% in the year to June 2020.

However, the group saw profits for the year fall to £166 million from £339 million last year, as mobile sales slumped 20%.

The retailer says that online has performed well, however consumer spending is still low – and the retailer believes that this will continue through the year.

The company’s chief executive, Alex Baldock, remains bullish: “The first ten months of the year was a story of delivering on our promises and accelerating the transformation of Dixons Carphone. We gained market share online as well as in stores, grew Credit and Services, drove big improvements in customer satisfaction, took difficult but essential decisions such as closing our UK standalone mobile stores, and were on track to meet financial expectations.”

He continues: “Since the year end, all our Electricals businesses have continued to grow sales. Where our stores have re-opened we’ve performed well, while continuing to see strong online sales growth. That said, we expect a weakening of consumer spending later this year and are being cautious in our planning.”

As a result, the retailer is looking at ways to conserve cash as the pandemic’s fall-out continues, with a plan to skip this year’s final dividend to shareholders mooted.

Baldock concludes: “We’ve learned a lot during this crisis and will emerge a better business from it. We’ve pioneered new ways of shopping, empowered our colleagues to move faster, and seen how technology is set to play an ever-bigger role in everyone’s lives. We’re also more convinced than ever that Dixons Carphone has the right strategy for our customers, our colleagues and our shareholders in the years ahead.”

This chimes Dixons Carphone rival AO World, which yesterday announced reported revenue of £1.05 billion in the year to 31 March, up by 15.9% from £902.5 million in the previous year.

AO World chief executive John Roberts said: “Covid-19 has accelerated a shift in customer behaviour towards online shopping and we now need to cement that change. In short, we must drive forward so those customers never look back.”

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