Now that most Christmas numbers are out, retail sector investors face a fundamental question: yes, the snow affected sales but were there deeper reasons for disappointing trading at particular companies?

Now that most Christmas numbers are out, retail sector investors face a fundamental question: yes, the snow affected sales but were there deeper reasons for disappointing trading at particular companies?

The question must be asked of electricals market leader Dixons Retail, owner of Currys and PC World, whose shares plunged after last Thursday’s update revealing that profits would only come in at the low end of expectations.

The ferocity of competition, resultant need for promotions and the fact that Dixons had a poor Christmas despite a strong product line-up of goodies such as 3D TVs and the iPad make the bears growl.

They would also have been unsettled by online own-goals that are estimated to have cost the retailer about £15m in sales. In today’s retail environment serious ecommerce mistakes at any time, never mind during peak trading, are worrying.

But while such details are important, surely the bigger picture at Dixons remains intact based on the evidence from last week. The fact that Dixons’ Scandinavian business performed so well supports the view that the disappointing showing in the UK genuinely reflected a snow impact rather than a fundamental problem.

And Dixons’ new-model stores continued to deliver the goods. They recorded gross profit uplifts of 20% or so, indicating that the strategy put in place by boss John Browett is the right one.

This week, Carphone reaffirmed its confidence in its Best Buy big-box venture in the UK, and flagged the success of the recently launched transactional website.

Best Buy, though still small, is only likely to grow, and online success will be a central plank of its strategy so Dixons cannot afford to make more cock-ups online.

Just how tough the electricals market is was evident again on Wednesday when Comet-owner Kesa brought forward its update following poor trading. On the evidence so far while Dixons’ shares were down, the business is not out.

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