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Dixons Carphone hails 4% sales rise as shoppers undeterred by Brexit

Published 08/09/2016

Dixons Carphone chief executive Seb James said shopper footfall had been 'really strong'
Dixons Carphone chief executive Seb James said shopper footfall had been 'really strong'

Electricals and mobile phones giant Dixons Carphone said the Brexit vote had not put consumers off from hitting the shops as it cheered "strong" trading.

The Currys and P C World owner notched up a 4% rise in like-for-like sales across the UK and Ireland in its first quarter to July 30.

Chief executive Seb James said so-called shopper footfall had been "really strong" in the latest sign that the June vote to quit the European Union has not yet dented consumer confidence.

He added: "We continue to see no detectable impact of the Brexit vote on consumer behaviour in the UK."

Official retail sales figures showed a far-better-than-expected 1.4% rise in July, which marked a rebound from June, when the high street suffered its sharpest sales fall in six months.

But not all retailers are convinced over consumer resilience, with John Lewis managing director Andy Street revealing on Wednesday that he feared shopper confidence had failed to bounce back to pre-referendum levels.

Dixons Carphone - created from the £5 billion merger between Dixons and Carphone Warehouse in 2014 - said it saw strong demand for televisions ahead of the summer's Euro 2016 football championship, while sales were also strong for smart fitness devices and watches, as well as PC gaming.

It added that the Pokemon Go gaming craze had seen demand for mobile phone chargers more than double, as players run down their phone power while glued to their screens.

The chain also said it had delivered sales growth in built-in white goods, such as washing machines and dishwashers, three times faster than the market after boosting its range available for next-day delivery and launching an expert installation service.

Mr James confirmed the rollout of its three-in-one megastores was "well on track", while the group's first quarter also saw it go live with a new Carphone Warehouse website and expand its click-and-collect reach for small products sold group-wide across 500 Carphone Warehouse stores.

He also gave an update on the company's US expansion plans through a joint venture deal with US telecoms group Sprint, with 31 stores now across five regions.

The firm plans to eventually open 500 outlets in the US.

The retailer's overseas operations also delivered robust like-for-like sales growth in its first quarter, up 13% in Southern Europe driven by Greece and 2% higher in the Nordics.

Shares rose 3% as analysts praised a stronger-than-expected first quarter.

Analysts at Liberum said the sales rise was "admirable up against tough comparatives" from a year earlier.

Alistair Davies, at Investec, said it was a "good start to the year, with first-quarter trading stronger than expected as the business continues to take market share in all regions".

Dixons Carphone is shutting 134 stores under plans to roll out electrical superstores merging its three main brands across the UK and Ireland.

It announced the plans in January, but said it would relocate all staff impacted to nearby superstores.

The disruption is having an impact on sales as stores are shut down, knocking around 1% off its UK like-for-like sales growth in its latest quarter, although the company said this was offset by a 1% benefit thanks to the transfer of sales to new superstores from the closed outlets.

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