Big electricals brands are increasingly offering multichannel retailers preferential terms over pure-play etailers, Dixons boss John Browett has revealed.
He said that only retailers with shops can showcase new technology and enable consumers to engage with it. Brands are therefore giving more margin to multichannel businesses.
“All the growth is in multichannel. People doing pure online are being penalised,” said Browett. “You can only do innovation and new sales within a store.”
Dixons posted a 7% decline in group sales in the 12 weeks to July 23, and in the core UK and Ireland market the slide was 10%.
However, the performance was in line with City expectations. Browett was confident about long-term prospects.
Online sales, driven by multichannel, account for 14% of the group total. Pure-play like-for-like sales through the Dixons.co.uk and Pixmania businesses fell 16%
Factors such as the Japanese tsunami disrupted supply of important product lines to Pixmania, which was hit as a result of its exposure to the economic turmoil in southern Europe.
Browett also played down speculation about a merger with Best Buy, but said there are opportunities for Dixons to work with other businesses and cited Dixons’ running Harrods’ electricals department as an example.