Vodafone to add 50 shops and hire 500 staff to boost service

Vodafone is to add 50 shops to its 350-strong retail network over the coming 12 months, hiring an extra 200-plus staff on top of the 300 already being recruited to improve its face-to-face customer service.

The first new outlets will be opened in Bristol, London and Liverpool this autumn, with the rest to be up and running by spring 2009.

"To deliver the best service, we need to make sure that our customers and potential customers can speak face to face with a retail adviser at a town near them," Tom Devine, the director of consumer sales for Vodafone in the UK, said.

The multimillion-pound expansion comes at a time when Vodafone's overall revenues are starting to feel the pinch from weakening consumer spending.

The company warned in July that annual revenues will come in at the bottom of the predicted £39.8bn to £40.7bn range, spooking investors and sending the share price down by 14 per cent in a single day, despite confirmation that earnings and cash flow would remain on track. Second-quarter results published at the same time showed UK growth down from 3.8 per cent to 2.1 per cent.

"Vodafone is now growing slower than both O2 and Orange in the UK, but they are still growing, which is more than can be said for most other markets," James Barford, an analyst at Enders Analysis, said.

"They did have a big push with cheaper tariffs, but growth has since dropped back and they are rolling out new shops now to bring it back up and improve competition with the other operators."

The consumer market is a logical place for Vodafone to focus. Despite its position only slightly behind the market-leading O2 in terms of UK revenues, Vodafone has a higher proportion of corporate and government customers.

A large mobile phone company can expand its retail network at relatively low cost, and there are considerable gains in terms of both reaching customers and promoting the brand. "Shops also save on people going to independent retailers such as Carphone Warehouse, where Vodafone has to pay a commission," Mr Barford said.