Dixons has released a trading statement today saying that the UK and Ireland are doing ‘very well’. No mention is made of the positive impact of its rival’s failure despite an oblique reference to ‘gaining more than our share of the market’. Dixons prefers to claim that it simply has a ‘stronger offer for customers’. It would be hard to have a weaker offer than Comet, really...
‘We are enjoying the feeling of a little wind in our sails and we want to make sure that, in spite of continued economic uncertainty, this carries on into next year and beyond,’ said Sebastian James, Dixons chief executive.
However, while sales in Northern Europe are rising faster than the breeze from a Dyson airblade, Southern Europe (comprising Italy, Greece and Turkey) is proving a real drag on the balance sheet. The ongoing debt crisis in the eurozone and high unemployment have caused Dixons’ retail sales to shrink 2% in March. It’s the second consecutive month of contraction. Sales in the region are down 8% across the year as a whole.
Dixons’ attempts to keep up with the online Joneses has also come a cropper. Pixmania, its internet retail arm specialising in digital photography and electronic goods, has pulled out of half the countries it was operating in as trading continued to be ‘very challenging’.
Despite these difficulties, Dixons still expects to turn a profit this year, forecasting underlying earnings of between £75m and £85m. ‘This strong year puts Dixons in the best position it has been in for many years,’ says the ebullient James. ‘Customers increasingly choose us when they need electrical products, and - more importantly - tell us that they like what we are doing.’