DSGi is to slash capital expenditure after revealing first-half like-for-likes tumbled 7 per cent.

The electricals retailer said that as a result of falling consumer confidence across Europe, particularly in more discretionary areas, it will focus on its cash position, cutting costs, improving margins and reducing stock.

It will cut capital expenditure by about£30 million this year, with reductions focused on “lower returning areas of lesser priority”.

DSGi attributed a 0.7 per cent fall in gross margins to its increased hardware mix and stock management in a “depressed market”.

Total group sales in the 24 weeks to October 18 were up 3 per cent. First-half like-for-like sales in the UK & Ireland electricals division were down 7 per cent. The UK computing division slumped 11 per cent. The Nordic arm experienced a 6 per cent fall and southern Europe tumbled 10 per cent. E-commerce like-for-like sales grew 9 per cent during the period.

The retailer said that the turnaround of its Italian business, UniEuro, shows “good progress in a tough market”, but that total sales were affected by its store closure programme.

It added that chief executive John Browett’s turnaround strategy dubbed Renewal and Transformation, was exceeding expectations, “offering confidence for the future”.

This week DSGi launched its much-anticipated Currys megastore in Birmingham.

The retailer is now also offering next-day delivery with three-hour time slots.

Browett said: “The trading environment continues to be tough. We are very focused on managing through this by reducing costs and improving our cash position. Alongside this we are progressing our Renewal and Transformation programme as it is delivering for customers and generating returns ahead of initial targets.”