In today’s Week in Peak update we look at how retailers from multichannel Dixons Carphone, Pets at Home and Mountain Warehouse to store-only Primark fared this Christmas. Plus payments specialist ACI Worldwide warns on rising click and collect fraud
Dixons Carphone has reported record sales, with strong contributions from online trading, over its peak trading period.
The electricals-to-mobile phones retailer, which trades as Currys PC World and as Carphone Warehouse, today said like for like revenues grew by 1% in the 10 weeks to January 5 compared to the same time last year, though underlying total sales remained flat.
In the UK and Ireland, electricals sales grew by 2% over the period, both in total and on a like-for-like (LFL) basis, compared to last year, but sales or mobile devices were down by 12% in total, and by 7% LFL.
In its electrical division, online sales grew by 8% over the period and have accounted for 28% of total sales in the year-to-date, up from 26% a year earlier.
Alex Baldock, group chief executive of Dixons Carphone, said: “Peak trading was solid and in line with expectations, producing record sales against a tough backdrop. We continued to grow our leading electrical market positions in all territories, online and in-store. In UK mobile, performance was as expected. Overall, our peak trading was disciplined and well-executed with stable gross margins.”
He added: “Credit and online contributed strongly, with our Reserve & Collect service having a strong peak as we started to bring stores and online closer together. And our increased investment in colleagues produced an easier end-to-end customer experience, with improved availability and satisfaction.”
Particularly strong sales growth was seen in televisions – as screens got larger – and in smart tech and gaming (+60%).
Around 40% of sales took place in its international markets, with particularly strong sales in Sweden, Denmark and Greece. International online sales grew by 22% on last year.
Dixons Carphone’s guidance on pre-tax profits remained unchanged at about £300m.
Currys PC World is a Leading retailer in IRUK Top500 research, while Carphone Warehouse is ranked Top50.
Pets at Home had its biggest day yet in the run up to Christmas. The pet supplies-to-vet practice company said that an “exceptional” omnichannel performance helped to lift sales in the third quarter of its financial year, especially following the launch of its mobile website.
Overall, group revenue reached £237.2m in the 12 weeks to January 3, up by 6.3% compared with the same time last year. Retail revenues rose by 5.5% to £213.4m, with omnichannel revenue of £19m 41.5% ahead of last time.
The retailer, ranked Top100 in IRUK Top500 research, said it may consider spending up to £8m on holding more stock as it approaches year-end, and as it continues to monitor the Brexit process.
Pets at Home chief executive Peter Pritchard said: “Momentum in retail accelerated over the festive period, culminating in the biggest trading day of our entire history on the Saturday before Christmas. Our omnichannel business delivered exceptional performance, benefitting from investments made earlier in the year, including a new mobile website. This resulted in 4.7% like-for-like growth in retail, an impressive 11% growth on a two-year basis.”
Pets at Home says that the pet care market remained resilient and that it expected to see group underlying full-year pre-tax profits come in at between £80m and £85m.
It also said that was seeing higher levels of spending and visits from members of its VIP loyalty club, and a 16% year-on-year rise in the number of VIPs who buy products and services.
Mountain Warehouse says it enjoyed its first £1m day on Black Friday 2018, while total sales over the course of the Black Friday weekend were 20% up on the same time in the previous year.
Total sales for the 13 weeks to January 6 reached £84.7m, 12% up on the same time last year, while online sales were 24.6% ahead.
Founder and chief executive Mark Neale, says the business is now on course for record full-year profits.
“The prior year’s performance was exceptional due to the cold weather and widespread snow we saw in the run up to Christmas 2017,” he said. “I’m therefore really pleased to report this record performance despite the unusually mild weather we experienced.
“This puts us well on course for another record year and as a result we are continuing to invest in more stores, new territories and our online business.
“We are also building our infrastructure with new customer service and distribution centres to make sure we keep delivering for the over 10 million people who shop with us each year.”
The retailer, ranked Top150 in IRUK Top500 research, is planning for expansion across sales channels, and across the continent. It opened a new customer services centre in Coventry in November to support online growth, adding 50 new jobs as a result. It is opening a distribution centre in Poland in order to underpin European store expansion, and it plans to open 60 more stores in the next 18 months.
Click and collect sales rose by 20% in the run up to Christmas – and fraud attempts on the channel rose by 13% at the same time, according to payment and banking solutions business ACI Worldwide.
It analysed hundreds of millions of global merchant transactions, including from leading UK retailers, to find that more shoppers opted for click and collect when buying last-minute gifts just before Christmas - as did more fraudsters.
Holes in the click and collect process are being exploited, says ACI, when retailers do not make sufficiently robust checks.
“As chip-and-pin credit cards are harder for fraudsters to replicate, it is driving them toward card-not-present fraud,” said Erika Dietrich, global director, payments risk at ACI Worldwide. “For example, fraudsters can use stolen credit card information to make a card-not-present purchase online and then simply walk in and pick up the item in-store. It’s not enough to simply ask the consumer for their ID, but retailers should always ask shoppers who pick up their item they ordered online for their ID and the card they used to pay for the product. We’ll see fraud around click and collect grow in the coming years and merchants will need to pay more attention to their omni-channel fraud controls.”
ACI’s findings also showed that overall, the volume of fraud attempts rose by 1% over the extendedChristmas trading period, from October 1 to December 31, while the value of fraud attempts was 6% ahead.
Overall fraud attempts decreased on Black Friday (1.30% 2018/1.59% 2017) and Cyber Monday (0.84% 2018/1.28% 2017) compared to last year.
Across the full period, shoppers spent 9% more to buy 16% more goods, says ACI.
Dietrich added: “We saw genuine consumer transactions outpace fraudulent transactions this past holiday season as merchant fraud strategies kept pace in the market. In addition, merchants have become savvier as they are spreading out the volume of sales earlier in the holiday season (October through November) compared to years past, to reduce fulfilment and delivery bottlenecks.”
Since InternetRetailing’s focus is on online and multichannel traders, Primark, which sells only through stores, is not listed in our annual IRUK Top500 research. Today we cover their Christmas trading update as a point of interest for the sector.
Sales grew as Primark opened more stores, but on the like-for-like measure, which strips out the effect of store openings and closure, sales were down, showing “a modest decline”.
The value retailer increased its share of the UK clothing market, where sales were up by 1%. ABF said that like-for-like sales were ahead in September and October before being hit by reduced footfall in November. Sales over Christmas, however, “exceeded our expectations”.
Sales in the Eurozone were 5% ahead of last year at constant currency. The retailer continues to open stores: by January 5, 364 stores were trading from 15.1m sq ft up on 14.2m sq ft a year earlier after it opened three stores in continental Europe and another in the UK. It also plans to open more stores in the current financial year. They will include stores in the UK, in Birmingham, Spain and Slovenia.
As Primark sells through only one channel, it’s notable that it was affected by wider trends that saw consumers take more of their retail purchases online in November. It will be interesting to see how Primark responds in the years ahead as fashion sales are likely to move more quickly onto the internet.
Image courtesy of Mountain Warehouse