Giant retailers set to ride unopposed into Europe

Dixons Stores Group (DSG) and Kingfisher have the know-how and market share to become pan-European players in the electrical products retail market, according to research.

Dixons Stores Group (DSG) and Kingfisher have the know-how and market share to become pan-European players in the electrical products retail market, according to research.

Both companies are pursuing European growth to generate the sales volume required to increase profit, according to Verdict on Electricals Retailers 2000, a report from retail consultancy Verdict. "The main excitement is the way they are attacking Europe. I don't think the competition are bothering," said David Kemsey, managing editor of Verdict's report.

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, Verdict said, but smaller retailers will have a more difficult task. They will have to rely on superior customer service, range selection and merchandising to compensate for higher prices.

DSG, which stands head and shoulders above the competition in the UK, holds the largest share of the European electricals market, Verdict said.

It is the dominant company in any UK retail sector, with an electrical products share approaching one third. But Kingfisher is not far behind, thanks to its ownership of Comet in the UK and Darty in France. Both Comet and Dixons-owned Currys are developing stores of about 30,000sq ft in prime locations for top-level product ranges.

The report also predicted the retail 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 its PC World and The Link outlets. But Verdict maintained that despite the opportunities created by the dynamic nature of the sector, retailers are still failing to translate these characteristics into captivating store displays.

There is still much scope to develop competitive differentiation through offering hands-on displays and clarity of product definitions, the report said.