Dixons warns of slowdown
Retail giant Dixons said it will focus on gross margins and reducing costs over the next 12 months, despite an increase of eight per cent in total group sales for the year ended 30 April.
John Clare, Dixons Group chief executive, said in a statement: "When we updated the market in November and January we cautioned that we were seeing a slowdown in consumer expenditure. We have managed our businesses accordingly."
Clare said he is wary about the next 12 months. "Price deflation continues to be a factor, which, combined with cost inflation and a cautious UK consumer, means that the environment will be very challenging. Our priorities remain a focus on gross margins and reducing our costs."
PC World total sales were up by 11 per cent, including a significant contribution from PC World Business, which benefited from the acquisition of MicroWarehouse in June 2004, according to Hamish Thompson, a representative at Dixons.
"The environment will be pretty challenging. Although the UK is still the lion's share of our business, a third of our sales are now coming from our international operations. We will be rolling out 100 PC City stores in France this year, and will be looking to enter Portugal as well."
Michelle Ryan, retail analyst at Lehman Brothers, told CRN: "The UK retail market has been very weak, particularly in the fourth quarter. The outlook is extremely cautious."
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