The latest results from Dixons Carphone demonstrate how the retail landscape of the all-important golden quarter continues to shift.
In reporting first-half results ahead of City estimates, the leadership of Dixons Carphone continues to confound any remaining scepticism that surrounds last year’s decision to merge the two companies.
The retailer is still benefiting from the demise of rivals such as Phones 4U and Comet but is taking market share from current rivals too.
That the combined group has maintained the agility to do that while navigating the potential pitfalls of a merger this size is testament to the skills of the management team.
It also speaks to the strength of the vision set out at the start of the deal to create an electricals retailer for a connected future.
Rivals will take note of the view of group chief executive Seb James, who said that with the foundations of the new group now in place it was “ready to settle into a more normal married life”.
Combined with the news of the appointment of retailing heavyweights Lord Livingston and Tony Denunzio to the board it was a statement of intent for the New Year and a warning that the momentum behind the group should only build.
But while the interest in the progress of the merger was high, there was as much anticipation of any hint Dixons Carphone’s trading could give into the performance of Black Friday and the shape of Christmas trading to come.
Dixons Carphone’s claim that Black Friday was a record trading day for the company continues to paint the picture of a polarised market of winners and losers.
Meanwhile, comments by chief financial officer Humphrey Singer that demand has ebbed in early December as shoppers take a breath before the final few shopping days before Christmas highlights the structural change in shopping patterns that poses a serious challenge to retailers.
“Christmas is now a season with two peaks and an inevitable valley in between – a valley that will be as tricky to navigate as the spike in activity either side”
Christmas is now a season with two peaks and an inevitable valley in between – a valley that will be as tricky to navigate as the spike in activity either side.
Data from Deloitte suggests that the industry’s reaction to these changes has been to push the button on large-scale Sales activity.
Discounts are poised to soar to an average of 45% at retailers across the UK this weekend – the sharpest pre-Christmas price cuts since 2008.
The short-term effects of this level of discounting on margins won’t be fully apparent until at least January, but they have far-reaching long-term implications about how the golden quarter will play out in future, from supply chain to trading strategies.
We will be online each day to guide you through the final countdown to Christmas and continue to tell the story of this extraordinary few weeks
All of us here at Retail Week wish you a successful Christmas period and a happy New Year.