Dixons sends shiver through retail sector

Dixons sent another shiver through the retail sector today after the electricals specialist said its rate of sales growth had slowed.

Dixons sent another shiver through the retail sector today after the electricals specialist said its rate of sales growth had slowed.

The owner of Dixons, Currys, PC World and The Link said it was cautious about consumer spending on "big-ticket" items and was prepared for an "aggressive trading environment" over the Christmas season.

The update comes a week after the British Retail Consortium said sales in October grew at their slowest pace this year, with consumer confidence viewed as weak after five interest rate rises in a year.

Dixons said UK sales grew by 6 per cent on a like-for-like basis in the 28 weeks to November 13 - compared with an improvement of 7 per cent in the 18 weeks to September 4.

Currys proved to be the strongest performer with a rise of 9 per cent, while PC World and Dixons both gained 3 per cent and The Link improved by 8 per cent.

Group chief executive John Clare described the performance in the financial year to date as satisfactory.

He added: "The rate of sales growth has slowed in recent weeks and we are cautious about the outlook for consumer expenditure on high-ticket discretionary purchases across the balance of the year, particularly in the UK."

Dixons suffered a dismal Christmas in 2002 and said its performance for this financial year would be "significantly affected" by the next few weeks.

Mr Clare added: "We are confident in our plans for Christmas and we are prepared for an aggressive trading environment."

The company also said margins across the group were 0.7 per cent lower than a year earlier. It blamed the fall on more business-based sales, the willingness of customers to settle accounts at the end of interest free periods and a change in the product mix at some of the company's electricals businesses.

Including international operations, Dixons said total group retail sales were 9 per cent stronger than a year ago, with the figure up 5 per cent on a like-for-like basis.