Online trading has been brisk at Dixons Carphone websites as people buy the technology that will allow them to work, live and be entertained at home. The retail group, which operates the Currys PC World, Dixons Travel, and Carphone Warehouse brands in the UK, says the early signs are that the strength of trading will help to compensate for sales lost as its UK, Ireland and Greece stores are now closed. Almost all of its shops in the Nordics remain open, says the company.
Dixons Carphone says it is taking steps to protect its staff who are still working to meet high levels of customer demand, and it expects to keep paying store staff while shops are temporarily closed.
In recent trading, electricals like-for-like sales grew by 8% in the 11 weeks to March 21, and by 23% in the last three weeks. Sales have been strong of laptops and printers for home working, TVs and gaming equipment for home entertainment, and fridges, freezers and other kitchen appliances for home living.
But while electricals sales rose in its Currys PC World business, its mobile sales – at Carphone Warehouse – dropped sharply, by 15% in the eight weeks to March 21, and by 24% in the three weeks to the same date. Overall, group sales rose by 4% in the full 11 week period and by 13% over the last three weeks.
The retailer says that while government action across Europe will help it to lower net operating costs, it is also cutting back on non-essential spending, and has reduced its stock ordering “significantly”. It is talking to suppliers to push delivery dates back and is moving towards monthly rent payments.
It says it now expects full-year pre-tax profits to be lower than the £210m it previously predicted. “The Covid-19 situation continues to develop and is likely to remain uncertain for some time,” said Dixons Carphone in today’s Covid-19 trading update. “We will therefore not update current year to medium-term guidance until the impact of Covid-19 becomes clearer.”
The company said that it would look again at whether it pays its full-year dividend in September, and added that it had access to more than £1bn in lending, of which £700m has yet to be used.
It added: “The group has modelled a wide range of scenarios regarding the potential impact on liquidity and covenants of the Covid-19 disruption and has detailed action plans in place to respond to each. We believe that we have sufficient funding capacity available to meet our obligations over the foreseeable future.”
Image: InternetRetailing Media/Paul Skeldon