Dixons Retail sees sharp drop in sales
There is further evidence of a cutback in consumer spending today after electrical goods group Dixons Retail posted a drop in sales.
The group, which is Europe’s no.2 electricals retailer, said like-for-like sales were 7% lower in the three months to 23 July compared with a year ago, which included a 10% fall in the UK.
However, the decline was in line with forecasts and the company said the fall compares with strong sales in 2010 due to the football World Cup and the popular launch of Apple’s iPad.
International like-for-like sales were down 6% in the period but the company highlighted it was trading ahead of weak markets in Italy and Greece.
The group is home to the Currys and PC World chains.
Despite the overall fall in sales, chief executive John Browett said the company had “outperformed its competitors during the quarter” and had “exited the period in good shape” and added that it remains on target to meet full-year forecasts.
The figures come just a day after the British Retail Consortium (BRC) reported weak retail sales for August.
According to the BRC, like-for-like sales (which exclude the impact of sales at new stores) fell 0.6% last month on an annual basis.
Furthermore, this week accountancy firm BDO warned Britain’s retailers should prepare themselves for some tough times as pressure builds on consumers in the run-up to Christmas.
According to the firm’s High Street Sales Tracker, sales figures for August fell 2.2% among mid-market retailers, attributed to the riots and cooler weather during the month.
Other major High Street retailers are due to issue trading updates in the next couple of weeks and analysts will be looking for further signs of trouble on the High Street.
Several retailers are under severe financial strain as the face their quarterly rent deadline at the end of this month.
Earlier this year, the rent deadlines at the end of March and June resulted in a series of retailers entering administration including Focus DIY, Habitat, TJ Hughes and fashion chain Jane Norman.
Finally, accountancy firm PricewaterhouseCoopers said that in the second quarter of 2011, 375 retailers call in administrators – a rise of 9% on the same period a year earlier.