Dixons Stores Group and Kingfisher have the know-how and market share to become main European players in the electrical retail market.
According to retail consultant Verdict, the companies are pursuing European growth to generate the sales volume required to increase profit.
David Kemsey, managing editor at Verdict, said: "The main excitement is the way they are attacking Europe. I don't think the competition are bothering."
The global purchasing power that a pan-European presence brings will further strengthen the two giants, and the outlook for larger, established players looks good, said Verdict. However, smaller retailers will have a more difficult time and will have to rely on superior customer service, range selection and merchandising to compensate for higher price positions.
Dixons holds the largest share of the European electrical market above the competition in the UK, said Verdict. It is the most dominant company in any single retail sector in the UK with an electrical products share approaching one third. But Kingfisher is not far behind with its ownership of Comet in the UK and Darty in France.
Both Dixons' Currys arm and Comet are developing stores in prime locations to offer top-level product ranges, with an emphasis on product testing and demonstration, as well as immediate product availability for customers.
Verdict predicts that the retails sector will continue to outperform overall expenditure growth over the next four years. Dixons has doubled its UK sales over the last five years, boosted by growth from PC World and The Link.
Despite the opportunities created by the dynamic nature of many products in the electricals sector, retailers are still failing to translate these characteristics into captivating store displays, said Verdict.
There is much scope to develop competitive differentiation through offering hands on displays and clarity of product definitions.
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