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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Multichannel sales up but high street sales down at Dixons - while Burberry 'outperforms'

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Almost a fifth of Dixons Retail sales are now made online, the company said today.

The electricals retailer, which owns the Currys, Dixons.co.uk, PC World and PIXMania brands, said it had seen “strong growth” in multichannel sales in the 12 weeks to January, with 19% of group sales generated online over that period.

In a third quarter trading update to the City, John Browett, group chief executive, said: “Our service-led business model continues to win over customers in all our key markets. We have made significant progress with KNOWHOW and see further opportunities to develop our services offering.

“Our multichannel offer is going from strength to strength with customers appreciating the benefits of our Reserve & Collect model.”

However while multichannel sales rose, high street spending was hit hard as consumer confidence failed. The retailer reported a 3% fall in total sales in the period, with like-for-like sales, which strip out the effect of store openings and closures, down by 5%. Dixons Retail trades across Europe and it reported growing sales only in its Northern Europe division, which includes central Europe and the Nordic countries. There total sales grew by 8% and like-for-likes were up by 3%.

In the UK, total sales fell by 6% and like-for-likes by 7%. But the worst performance came in Southern Europe – Italy, Greece and Turkey – where total sales were down by 12% and 10%, like-for-like. PIXmania also saw its sales fall by 8%, or 7% on a like-for-like basis.

Browett said: "This is a solid performance against a challenging backdrop,” adding: “Consumer confidence in many of our markets remains fragile and we will maintain a cautious approach to the outlook for the year ahead. We have set our business accordingly and will continue with our self-help strategy to improve the offer for customers.

“Our renewal and transformation plan is continuing to make the business better, easier and cheaper to run and delivering an unbeatable combination of value, choice and service for customers."

At multichannel luxury retailer Burberry, however, the story was one of growth, put down in part to its adept use of digital and social media. In a third quarter trading update, it reported a 21% growth in revenues to £547m, with income from retail sales growing by 23%. It reported outperformance in its flagship markets of London, Paris, Beijing and Hong Kong and said comparable store sales growth was up by 13%.

The company,which sells online and through stores around the world, has gained a strong foothold in social media. Today it reported it had more than 10m Facebook fans and 10m You Tube views.

Chief executive Angela Ahrendts said: "Burberry has delivered another strong performance, with a 21% increase in revenue in this important third quarter.

“Our investment in flagship markets and digital technology has enabled our global teams to continue to drive customer engagement, enhance retail disciplines and improve operational effectiveness, further strengthening brand momentum.

“Looking ahead, we remain focused on executing our proven core strategies to achieve long-term sustainable growth, while staying mindful of the challenging macro environment."

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