Dixons likely to tighten its grip

THE SHAKE-OUT in the electrical retail sector is set to continue, according to a new report published today, with large players such as Dixons likely to tighten their grip on the market.

The study, by Verdict, the retail consultants, predicts that the pressure on smaller chains and independent operators will increase, forcing some out of business and others into the arms of more powerful competitors.

Dixons dominates the sector, with a market share that has grown from 17 per cent to 27 per cent in five years. Its growth has been helped by the removal from the market of most regional electricity companies and rivals such as Rumbelows.

New product launches should give the sector a major boost as the millennium draws near, the report says. It suggests that digital technology, particularly in televisions, mobile phones and video games, will provide the biggest sales push. Most of the gain will come in the second half of this year, Verdict says.

Consumer spending on electrical goods grew 5.3 per cent last year, down from 1997's 6.3 per cent when spending was boosted by building society windfalls.

The report criticised electrical retailers for failing to develop exciting store concepts. "There is very little to choose from between the specialists in terms of in-store environment or theatre. Despite the innovative and dynamic nature of the products, the retailers have consistently failed to translate these characteristics into their stores."