DSGi dismisses threat of Best Buy's arrival in UK as sales of iPads and TVs soar
Friday 03 September 2010
The chief executive of DSGi, owner of the Currys and PC World retail chains, has seen "no impact" from the launch of Best Buy in the UK.
John Browett made his comments as he unveiled a 6 per cent surge in first-quarter underlying sales in the UK and Ireland – its biggest uplift for four years. The "encouraging" performance was driven by soaring sales of Apple's iPads, and TVs before and during the football World Cup.
Best Buy, the world's largest electricals chain, opened its first three stores in the UK this year in Essex, Southampton and the West Midlands, but DSGi said it had actually seen a sales uplift in its adjacent stores since then.
Mr Browett said: "We are a bit surprised. The reality is that there is no impact in our business from anything they have done. When they [shoppers] came to our stores they always cross-shopped. They thought our service and range was better."
DSGi, which runs the Dixons website and has operations in countries from Italy to Spain, posted a 3 per cent rise in underlying sales for the 12 weeks to 24 July. However, it was dented by a weak performance in Greece, where the economy has been in dire straits.
During the World Cup, DSGi – which will soon be renamed Dixon Retail – grew TV sales by 40 per cent, compared to four years ago.
It was boosted by its "cash for goals" promotion: before the tournament started, Currys offered customers a £10 voucher for every goal England scored if they bought any TV for £599 or more. While the group paid out "millions" of pounds to customers, including for Frank Lampard's disallowed goal against Germany, DSGi had been fully hedged and benefited substantially from the uplift in TV sales.
Mr Browett said: "We had a very good World Cup," adding that it grabbed "significant [market] share during the tournament".
DSGi also benefited massively from its semi-exclusive deal with Apple to sell the iPad in June and July.
Mr Browett said it had been "bowled over by the interest" in the iPad. He added that the new iPad would be a "winning product at Christmas".
He was also bullish about its new 3D-TV products during the so-called golden quarter for the sector. "3D TV is really a breakthrough for us. It is something that customers really want," said Mr Browett.
Total sales at DSGi rose by 3 per cent, helped by its Nordic chain Elkjop continuing to perform strongly.
As part of its transformation programme, DSGi said it had been "incredibly active reformatting stores" with 43 completed during the first quarter.
It is on track to have stores representing 60 per cent of sales reformatted before the Christmas peak.
Mr Browett said he was not "expecting a dramatic" impact from the 2.5 per cent rise in VAT to 20 per cent on 4 January. "It is £25 on a £1,000 TV so if you are in the market to do it you will buy it," he said.
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