Paranoia at Dixons: one high street giant’s key to beat the web

Against all odds, Dixons survived as other major retailers collapsed. As Simon neville reports, fear keeps its management on its toes

Last Christmas saw a bloodbath on the high street for traditional retailers struggling to get to grips with the evolving face of the British retail scene as the internet came of age as the destination of choice for festive shoppers.

Blockbuster, Comet, Jessops and HMV all collapsed, leaving tens of thousands of staff without a job and traditional shopping streets and malls looking decidedly depleted.

All four traded in the low-margin, highly competitive area of electronics or technology and the casual observer could be forgiven for thinking that any remaining rival is likely to be top of the critical list this year.

But they would be wrong, or certainly in the case of PC World and Curry’s owner Dixons, which is set to see sales jump by up to 9 per cent in today’s interim results. Shares hit a five year high last night and are no doubt likely to rise further today.

However, the chief executive, Sebastian James, will be the first to admit the firm has struggled for several years to stay relevant and despite winning 30 per cent of Comet’s former customers when it went bust, he remains cautious. Speaking recently to the Independent, he said: “All shops that aren’t totally paranoid are doomed. We are totally paranoid all the time and we always panic that tomorrow is going to be the Armageddon. I think you see that in stores that have been successful, so we definitely can’t rest on our laurels.”

Analysts have suggested HMV did just that after the collapse of its rivals including Game, Virgin Megastores, Tower Records and Zavvi, along with WH Smith leaving the music and DVD market.

Apple came along with its iTunes store and digital downloads, leaving HMV eating its dust, while the supermarkets undercut the company on DVDs and the once-proud music store went bust.

Mr James recognises the comparisons and realises he must keep evolving the stores to keep up, but he added: “There is a fundamental difference between us and HMV and that is that you can’t download a printer, whereas HMV’s market simply evaporated because they were selling something that no longer had an physical presence.”

But how can a company like Dixons really compete with loss-making Amazon when it has such huge overheads such as rents and business rates?

Mr James has an answer: “If you want to buy something that costs a month’s salary, you want to make sure you’ve bought the right product... and it’s set up properly and you’ve got the right stuff [to go with it.]  Amazon might be extremely clinically efficient at taking your order online and shipping it to your house, but we match on price and can demonstrate it with someone really nice to show you how it works.” The problem for Dixons is, while staff might be “really nice” the general perception is one of incompetence and dreadful customer service – something Mr James readily admits.

He said: “Historically we were hopeless. When you look at our Which? Report we still come bottom or near bottom because we’ve a 30 year legacy of being a low service business and the customer rightly doesn’t forgive you for a while, so when customers come in and get good service their overriding emotion is one of surprise.”

Two years ago customer satisfaction sat at a lowly 44 per cent, now it is up to 83 per cent, and improving, but Mr James readily admits it will take at least five years to truly change people’s perceptions of the company.

But the biggest issue for Dixons is keeping up with new technology and products – with Mr James pointing out three years ago tablet computers barely existed and now they are set to be one of the biggest Christmas sellers.

Store ps are helping, with a new concept store opening last month in Aylesbury seeing double digit growth.

Lastly, all the fixtures are on wheels, meaning the store can be remodelled overnight, so should the country’s love affair with cooking come to an end, the mixers may no longer take pride of place by the entrance. Either way, Dixons still has some way to go if it is to challenge its online competitors and remain a high street force to be reckoned with.

Dixons by Numbers

9% The amount sales have jumped

30% Ex-Comet customers won

Alexis Sanchez has completed a £35m move to Arsenal, the club have confirmed
sportGunners complete £35m signing of Barcelona forward
Poor teachers should be fearful of not getting pay rises or losing their job if they fail to perform, Steve Fairclough, headteacher of Abbotsholme School, suggested
voicesChris Sloggett explains why it has become an impossible career path
world cup 2014
Ray Whelan was arrested earlier this week
Arts and Entertainment
In a minor key: Keira Knightley in the lightweight 'Begin Again'
Arts and Entertainment
Celebrated children’s author Allan Ahlberg, best known for Each Peach Pear Plum
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
Wayne’s estate faces a claim for alleged copyright breaches
newsJohn Wayne's heirs duke it out with university over use of the late film star's nickname
Life and Style
It beggars belief: the homeless and hungry are weary, tortured, ghosts of people – with bodies contorted by imperceptible pain
lifeRough sleepers exist in every city. Hear the stories of those whose luck has run out
Mick Jagger performing at Glastonbury
Life and Style
fashionJ Crew introduces triple zero size to meet the Asia market demand
ebookA unique anthology of reporting and analysis of a crucial period of history
Santi Cazorla, Mikel Arteta and Mathieu Flamini of Arsenal launch the new Puma Arsenal kits at the Puma Store on Carnaby Street
sportMassive deal worth £150m over the next five years
Arts and Entertainment
Welsh opera singer Katherine Jenkins
musicHolyrood MPs 'staggered' at lack of Scottish artists performing
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Arts and Entertainment
Currently there is nothing to prevent all-male or all-female couples from competing against mixed sex partners at any of the country’s ballroom dancing events
Potential ban on same-sex partners in ballroom dancing competitions amounts to 'illegal discrimination'
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Analyst Consultant (Financial Services)

£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Systems Administrator - Linux / Unix / Windows / TCP/IP / SAN

£60000 per annum: Harrington Starr: A leading provider in investment managemen...

AVS, JVS Openlink Endur Developer

£600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...

Technical Support Analyst (C++, Windows, Linux, Perl, Graduate)

£30000 per annum: Harrington Starr: A global leader in trading platforms and e...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice