DSGi is gearing up for Best Buy’s imminent UK debut with more megastores and overhauled service.

The opening round of one of the most anticipated stores showdowns of recent years is now just weeks away.

The rumble in the retail jungle pits electricals market leader DSGi against US giant Best Buy. Which store group is Ali and which Foreman will gradually become clear as the pair slug it out in a contest to be the undisputed heavyweight.

Nowhere is the stand-off more evident than in West Thurrock in Essex, where DSGi’s Currys has opened a megastore across the retail park tarmac from one of Best Buy’s first big blue boxes.

It was at the Thurrock megastore that DSGi chief executive John Browett last week chose to unveil the latest progress of his improvement strategy and show off the changes made at the business under his leadership.

The shop epitomises the overhaul initiated under Browett’s renewal and transformation plan. Covering 55,000 sq ft of selling space, Thurrock is a destination store designed to excite shoppers with its breadth of offer, complemented by deep product knowledge and high service standards. It is intended to put into action DSGi’s strapline: “Bringing life to technology”.

Consumers can find out how 3D TV looks, try out the latest computers with the assistance of Apple “specialists” and Microsoft “gurus”. They can watch cookery displays using the latest kitchen technology, or settle down in home cinemas to experiment with every variation of sound and vision.

Browett says: “They are real destination stores. You go there and you don’t need to go anywhere else because they are the best TV shop, the best camera shop, the best in all categories.”

To be the best was Browett’s objective when he was appointed to the top job at DSGi three years ago, when the retailer - despite its number one position - was mired in difficulties and faced an uncertain future.

His efforts have brought new spark to the group, which operates stores from Scandinavia to Spain as well as in the UK. So successful has DSGi’s UK megastore format been that openings are now being accelerated. From eight at present, the intention is to add 25 by Christmas and a total of 70 eventual locations have been identified so far.

Most will combine elements from electricals specialist Currys and its sister PC World chain. The retailer is opening more two-in-one superstores combining both offers as well - 60 this year - and has been reformatting standalone shops.

Altogether, 139 stores - which account for a third of the group’s sales in the UK and Ireland - have been reformatted. The result has been a gross profit uplift of 20% on average in the 24 weeks to March 6, when megastores and two-in-ones performed especially strongly. That followed a good Christmas for DSGi, which estimates that transformation initiatives boosted like-for-like sales by about 3%.

A format for change

Most of the new megastores will be created from existing stores in DSGi’s portfolio, as will two-in-ones, which represent a big opportunity for PC World to reach more Currys shoppers - there is only an 18% overlap between the two chain’s customers - and the dual-format approach brings improved stock efficiency because there is only one, consolidated range.

“Two-in-ones will be the core of the estate,” says Browett. “The big problem in the UK is getting high-quality real estate and we are in a fortunate position.” In the long term, DSGi will reduce store numbers from 664 to about 500 - concrete plans are already in place affecting 127 locations without a reduction in space.

As well as an improved product offer, DSGi has made a determined effort to shake off its old reputation for overly aggressive salesmanship and emphasised its service credentials. The reputational battle for service will be one of the key engagements when Best Buy launches, importing its legendary “customer-centric” model from the US.

Browett says that good service leads to good sales. He points to “customer journeys” such as that involved in buying a new TV, where education of consumers and explanation of key product differences and benefits are at the heart of the sales process - especially in the internet age, when consumers will also undertake their own research online.

“Customers like the customer journeys - it is not seen as hard selling,” says Browett. Over the past 12 months more than 4,000 DSGi staff have been trained in order to help shoppers work out which product is “right” for them and the results are clear in shopper research.

The research has found that 80% of customers are likely or very likely to recommend DSGi to others, compared with a historical trend of 50% or below, and the number who rate the retailer poorly has been reduced.

Along with customer engagement has come improved supplier relationships, which have in turn improved both stores and service. Innovations such as the Apple and Microsoft areas have been replicated in other product categories as suppliers see the potential for them to benefit.

Browett says suppliers have been “incredibly supportive all the way through”. He explains: “We have a role in the market that they are absolutely dependent on - the introduction of new and different product. They have wanted us to do this for years.”

Shore Capital analyst Kate Calvert believes DSGi is well placed for the market changes to come. She says: “With suppliers starting to discriminate between multichannel players and pure-play online retailers, DSGi is in a strong position to exploit buying and sourcing benefits as well as leverage its scale efficiencies and shared supply chain.”

And, says DSGi chief finance director Nicholas Cadbury, supplier buy-in has given the retailer greater self-assurance that it is doing the right thing and to introduce products that it would not have sold in the past. “A few years ago, we wouldn’t have had the confidence to sell a £1,000 Jura coffee maker,” he maintains.

Oriel analyst Ramona Tipnis says: “There is no question that DSGi is continually improving its stores, which is very evident in the growing number of premium manufacturers that are looking to showcase product in these stores.”

DSGi is also increasingly positioning itself, through innovations such as its Tech Guys service and similar, as the consumer’s guide through the Gordian knot of new technology. Increasingly that means delivering and installing products rather than simply closing a sale in-store.

The latest such service the retailer is piloting is a “follow me home” option whereby staff will take consumers’ goods to their houses in a lorry straight after purchase and install immediately.

Such extras are increasingly important and Calvert says DSGi is making strides. She observes: “DSGi makes 60,000 deliveries a week and is getting 95% of its deliveries right first time.

It has seen a significant improvement in its second deliveries, which is now running at 98% according to management - up from 60%.”

The Best Buy threat

While DSGi has, maintains Browett, made a “step-change” in service there is still more to do. He says: “It is like climbing Everest. We are at base camp, but a lot of people don’t even get to base camp - they don’t even try.”

But effort, as Best Buy prepares to debut, is essential and DSGi’s is increasingly recognised. Tipnis, who visited Thurrock last week, says: “The store environment coupled with service and merchandising should prove to be up to the challenge of the opening of Best Buy store just across the car park.”

Similarly, Arden analyst Nick Bubb remains sceptical about the extent to which Best Buy will change the electricals retailing landscape and even contemplates whether it could be a bit of a damp squib. “It has only got four stores,” he points out. DSGi on the other hand, has “moved the game on” and is as focused on targeting rivals such as Comet or Argos as anybody else.

Browett dislikes the constant comparisons with Best Buy, from whom no comment was available. He says DSGi had to change - and was changing - whether or not the American powerhouse was coming.

“The reason we are doing what we are doing is it is great for customers,” he insists. “Our job is to delight the customers and the customers will judge.”

He is confident that the ongoing transformation of DSGi, as exemplified by the Thurrock store, will exert appeal to shoppers.

“We have done a lot of work on whether our formats are world class,” he says. “We have benchmarked all around the world and tried to take things to a new level. We think this is pretty good.”

Reshaping of DSGi’s stores

  • 152 stores exited since May 2008
  • 33 megastores to be trading by this Christmas
  • 70 target for UK megastores
  • 60 two-in-one Currys/PC World shops to open this year
  • 500 long-term target for store count (down from 664), with little or no space reduction as a result of larger stores


It was back in 2008 that Best Buy and Carphone Warehouse forged a joint venture to launch Best Buy Europe and import the groundbreaking US big-box electricals model to the UK.

Famous for its sky-high levels of customer service, Best Buy’s debut here was seen as a deadly threat to incumbent market leader DSGi.

However, it has taken Best Buy longer than planned to open its first shops in this country, originally scheduled for last year but only making their debut this spring.

At present Best Buy has four UK properties. Thurrock and Hedge End in Southampton are expected to be the first openings, but the retailer intends to open about 100 European shops - including between 70 and 80 in the UK - by 2013.

Best Buy’s launch will pit two former Tesco directors against one another. DSGi’s Browett and Best Buy Europe chief executive Scott Wheway both earned their spurs at the giant grocer.