As Dixons reports a strong start to its financial year, the electricals specialist’s boss Sebastian James talks through the highlights with journalists and how he intends to further drive this growth.
How do you feel about Dixons performance?
I’m gently encouraged. The UK and Ireland and Northern Europe is a little better than anticipated. Our service based selling has helped us gain market share in our key markets. We’re doing significantly better than all of our multichannel competitors in the UK.
I’m particularly pleased to see market share growth as customers are choosing to us. It’s excellent for us and our suppliers.
What is your strategy in the UK?
Our goal is to drive prices hard and leverage that to sell the ecosystem around products. Our UK gross margin rose slightly [in the quarter].
What about southern Europe where sales have plunged?
The markets are pretty dire. We’re not doing bad given the market is down substantially more [than its sales decline]. Greece is significantly better than we feared. We’ve actually had 4% share growth. Italy is very difficult. Consumer confidence is at an all time low everytime it’s measured there.
Your online sales grew 39%. What are you doing to drive this growth?
We’re doing a lot this year and a lot before Christmas. We’ve dramatically improved our search and we’ll be crediting stores with online sales in their catchment area. Its good practice but surprisingly few retailers are doing it.
Currys mobile optimised platform launched three days ago. We’ll have a multichannel proposition that is as good or better than anyone.
How are you competing with the likes of Middle England favourite John Lewis?
John Lewis is a terrific store. We’re competing on a similar service-led platform. It’s people who are not doing that strategy which are suffering.
What were the big sellers over the period?
The Euros and The Olympics helped us sell more tellies. I can’t say we saw a spike before the events but we had gentle growth.
People are buying bigger and buying smart TVs. Smart TV sales trebled over the quarter [Dixons sold 92,000 devices over the quarter] and we’re selling five times the amount of 55 inch tellies. We’ve sold 10,000 in the period. More people are looking for the home theatre experience. The growth in sizes means that average revenue per product is going up. The starting price is around £1270.
Will the growth in smart TVs continue?
Everyone will have some form of smart TV in a couple of years.
Could this cannibalise sales of computers?
No. The number of devices connected to the internet has increased from 1.8 to 4.2.
How are computer sales performing?
Computer sales, especially tablets are quite strong. I’m amazed there is anyone who still hasn’t got one. We sold twice the amount of iPads that we did last year and three times the amount of tablets. The week the [Google] Nexus 7 launched we sold seven times as many tablets. However there has been a slowdown as people wait for Windows 8 to be released.
What is your outlook like for the rest of the year?
August has been slower. Like-for-likes will come down as we’re against tougher comparatives [in the second quarter]. It’s early days but we’ve had a decent start and it’s a bit better than we hoped for. We’re not extrapolating anything from it though, the market it is still tough and we’ll plan in that context. We’re not planning for a future when the world is back on its feet.