DSG International (Currys, PC World and Dixons) have reported a sales plunge of 7% on a like-for-like basis today and confirming it will not be making a profit in the first half of the year.
DSG chief executive John Browett said that, “˜Consumer confidence has significantly deteriorated particularly in more discretionary areas,’
“˜The trading environment continues to be tough. The market in large-screen TVs has come off. People can carry on with their old TVs, and that is what they doing.
We are also seeing a slowing in the laptop market. It is still growing strongly but not quite as well.
We have already seen the slowdown in white goods but this has not got any worse. We are now firmly in the replacement cycle where people have to come and get their new washing machine when the old one gives up.’
DSG has been in troubled waters for some time, crashing out of the FTSE 100 to the point where its shares now value the group at less than £500million.
It is being caught in a storm of collapsing consumer confidence and increased competition with the arrival of the US giant Best Buy to the UK. And, now with the crash in the value of sterling which will push up the price of imported electrical goods.
DSG had previously reported a 7% fall in trading in the summer, and the last eight weeks have also shown a decline of 7%
“˜We have been preparing for a recession all year,’ said Browett.
“˜We knew the road would be rocky and it is a very tough environment. We saw good trading in early September but that went away after the collapse of Lehman, and consumers began to start worrying whether their bank deposits were safe.
‘We have seen waves of lack of confidence but we have not seen the end of the world. People are still shopping.’
Detailed sales figures show DSG’s Dixons online business to be the single star performer. The online business makes up 15% of DSG sales, Dixons and web-based sales in general were up 9%, growing faster than the 6% previously reported.
UK electrical sales were down 7% while UK computing sales fell 11%.
Its Scandinavian business has also suffered with sales down 6%, while its Italian and southern European operations showed some improvement but are still down 10% on last year’s figures.