DSG trials new format store in Scandinavian retail parks

DSG International, the owner of PC World and Currys, is trialling a new format store in Scandinavia hoping to tap into the popularity of shopping centres, which are expanding all over the region.

Three stores, which are between 30 to 50 sq m, opened last month, in and around Oslo, in Norway, and take the format of a kiosk or small outlet within existing shopping centres.

If successful, the pilot stores, which sell mobile phones, MP3 players, digital cameras and other small electrical items and accessories, will be rolled out across Scandinavia. Customers can also get photographs printed out from their digital images at the kiosks.

DSGi already operates around 270 larger stores in the region after acquiring Elkjop, the leading electrical retail in Scandinavia, in 2002. These are mostly located in out-of-town retail parks. The new format stores are branded Express and carry the slogan Powered by Elkjop, to benefit from the well known name.

Pål Vedal, DSGi's Nordic sales director, said the stores are "a brand new concept". As the larger Elkjop stores are located in retail parks, DSGi has been missing out on shopping centre sales due to its lack of presence in the indoor malls, which appeal more to women, the youth market and older people, he said. Research shows that consumers browsing in shopping centres are also more likely to make impulse purchases, while big ticket items, such as those sold in retail parks, are likely to be decided in advance. Consumers will drive to the parks with a set purchase in mind

Shopping centres are particularly popular in Norway, where winter stretches from November through to April when much of the country is covered in snow.

Mr Vedal said the stores were unique in the ranges they offered. While most mobile phone specialist stores were linked to one operator and are only able to stock limited ranges, the Express stores stock 120 different handsets, with contracts available with each operator. There are also 60 different MP3 players on sale. Mr Vedal, who has been working on the concept for eight months, said the first few weeks of trading at the stores had exceeded expectations.

Scandinavia represents around a fifth of DGSi's sales and the company employs more than 5,000 staff in the region. Sales grew by 24 per cent last year to £1.4bn, with like-for-like sales up 9 per cent. Underlying operating profits were 9 per cent ahead to £91m.

DSGi posted a 25 per cent drop in first half underlying profits in November, blaming a lack of demand for new laptop computers at PC World and problems at its Italian stores.