Dixons has picked up a lot of market share over the last year, thanks to the demise of Comet, but can they now build on that success?

Dixons has picked up a lot of market share over the last year, thanks to the demise of Comet, but can they now build on that success?

In recent months much of the focus of the stockmarket has been on all the work Dixons has been doing to get rid of its loss-making peripheral European businesses, which has helped make the group a much simpler and more direct play on its core UK and Nordic market-leading, multi-channel consumer electronics operations.

As it happens, it is exactly a year since Dixons’ leading UK specialist rival, Comet, went out of business, so Tuesday’s analyst and investor visit to the new Currys PC World store in Aylesbury was a good and timely opportunity for CEO Seb James and his UK management team, led by Katie Bickerstaffe, to show that they have plenty of ideas on how to push further forward.

The last 12 months have been very good for the Currys and PC World businesses, as the market has been buoyed by the explosion in demand for tablet PCs and they have taken more than their fair share of Comet’s former market share.

The result has been very impressive LFL sales growth and a very decent recovery in profitability, but that, of course, only provides a tougher comp for the next 12 months. The improvement in consumer confidence and the housing market is obviously helpful, but there is no slackening in the competitive pressure from Amazon, Argos, John Lewis and the pure plays.

The recent revamp of the Bluewater store has shown how the group can put its best foot forward in a “High Street” location, but most of the UK business is now “out of town” and Aylesbury was chosen to showcase the group’s latest thinking on how an electricals “2 in 1” superstore should now look.

Ironically, the new combined Currys PC World store in Aylesbury used to be a 20,000 sq ft Comet store (next door to an Argos on a big edge-of-town retail park). It opened on September 6th and Dixons has been very pleased with the results to date.

The most surprising difference about the store is that, despite the very high ceiling, the merchandising in the store is all very low-level. This clearly helps with sight lines across the store for customers and staff, but it means, for example, that the TV “back-wall” is less impressive than usual and the eye tends to be drawn to the big but rather plain departmental signs around the walls.

But the emphasis in the Aylesbury store is on the so-called “customer journey”, with simple messages and information boards to help focus on what product information people really want. It was good to see, by the way, that the TV department focuses on things like screen size and picture quality rather than trying to sell customers the connection cables.

The white goods area focuses on innovation and there is a surprisingly prominent department for “Floorcare”, with steam cleaners the latest big thing (and the next evolution here is that the Lakeside superstore is to get a new-look White Goods and Small Appliance department in January).

The PC department is interesting, as the play-tables are much smaller than normal, to help the staff and customers get close to the product, and the focus is on Microsoft and Windows rather than on Apple (albeit the Fulham megastore has just had a new Apple shop-in-shop refit).

The emphasis in the store is on making the fixtures flexible and capable of storing plenty of product stock underneath, with a united front presented to multichannel consumers. Management also gave demonstrations of the impressive data analytics now available to Dixons from its rapidly growing website traffic and of all the new services available under the KnowHow brand (the store has a central seating area for customers, where staff can “ShowHow” products work).

There was no current trading update, with the interims on December 17th not far away, but the impression given was that market share continues to improve and that management have plenty of ideas on how to keep pushing the business forward.

Former Dixons’ boss Stanley Kalms would probably balk at the lack of price messaging in the new Currys PC World store in Aylesbury, but it’s good to see that “old dogs can learn new tricks” and that the store focuses instead on providing better customer service.

About Nick Bubb

Nick Bubb has been a leading retailing analyst for over 30 years. He is a well-known commentator on UK retailing and is a founder member of the influential KPMG/Ipsos “Retail Think-Tank”.