AO Asks For Supplier Discount After Dixons Jibe

AO.com has written to its suppliers to ask for price cuts following claims by high street rival Dixons that its prices were lower.

Dixons, which owns Currys and PC World, last month circulated documents to City analysts that are understood to have included the suggestion that prices on comparable goods were on average 3 per cent lower than online rivals.

It also claimed that its internet sales would overtake those of AO.com within two years.

AO.com, which currently focuses on the £3.2 billion large domestic appliances market, has written to suppliers to ask if the claim is true and to demand talks if it is.

Investors have seen the arrival of AO.com on the stock market as a threat to Dixons which has £8.1 billion sales compared to AO's £275 million.

Dixons said in the report it had grown internet sales at 47 per cent a year for the past four years - faster than the 30 per cent growth at AO. But AO is also planning to add new products such as televisions and open in overseas markets which could give a bigger overlap with Dixons.