Dixons Says It Can Compete With Online Rivals As Tablets Spark Gold Rush

Currys and PC World-owner Dixons Retail said it can match prices at online rivals as the group said UK profit surged in the past six months.

The company said it monitors over 20,000 products every day and that prices are 'competitive' with pure-play competitors, despite the burden of having a bricks-and-mortar stores chain to fund.

Dixons said a rush to buy tablet computers and other gadgets at its Currys and PC World stores led to a fourfold rise in profits in the six months to October 31. Underlying profit in the period was £31.4 million at its UK and Ireland division compared to £6.9 million the year before.

Total like for like sales in the UK, which sells more than a quarter of its products online, increased 9 per cent in the period.

Chief executive Sebastian james reportedly said yesterday the company was 'out of the hospital ward' and planned 'shape up and overtake our principle online rivals next year'.

He said: 'We think our competitors are mainly pure-play [retailers] and if we can better them we will crush everybody else. There are some areas like online customer service where they're better than us and we are clunkier.'

The company has sought to turn around its business in the face of strong competition online and the demise of its main physical rival Comet last last year, which has helped boost revenues in the past 12 months.

Dixons is likely to benefit from a heavier reliance on product insurance and paid-for after-sale services than many online retailers, which can be highly profitable. But the value of such insurance policies and warranties to customers are also repeatedly questioned by many consumer commentators.

It also said the support of suppliers boosted the business because they are keen to a major high street player remain to allow them to better present products and new ranges. 

Dixons said: 'Suppliers want customers to experience their products, particularly their latest innovations. We are very well placed to meet the needs of both, to create an exciting and engaging shopping trip for customers.'

Dixons measures underlying profitability to show that it is making progress in its individual businesses in Greece, Scandinavia and the UK. However, at a group level it made a loss of £83.5 million compared to a loss of £101 million last year as it exited businesses in Turkey, Italy and its France-based Pixmania business.