Dixons at centre of PC price row

Dixons Stores Group was among the main retailers reeling from an attack by Fujitsu, supported by research from Inteco, that UK PC prices are being kept artificially high.

The claim comes in support of Fujitsu's attempt to sell its PCs at a European pricing level through the Tesco and Asda supermarket chains, but the plan was rebuffed by the retail giants. Fujitsu's claims have been passed onto consumer affairs minister Nigel Griffiths.

The damning report from Inteco's latest research revealed the average total spend for a PC in the six-month period Q4 1997 to Q1 1998, in the UK was £1,393, compared to £1,194 in France and £1,012 in Germany.

Martin Hurren, product manager for the Pavilion range at Hewlett Packard, said: 'A retailer may have substantial investment plans and may need to recoup costs through higher margins. But we feel our interests are best served by the traditional computer retail channel.'

Hurren added that he felt the market was not mature enough to support PC sales through a non-specialist retailer, citing returns and after-sales support as stumbling blocks.

Hamish Haynes, Compaq consumer business unit manager, said: 'You can't just stick a PC on the end of an aisle with a cheap price tag and expect it to sell.'

Peter Day, analyst at Inteco, stated: 'Supermarkets entering the market will raise awareness of PCs for the public and could grow the market.

The entry of new players could also start a price war, as the likes of Dixons have to start competing with Tesco and Asda.'

Meanwhile, Dixons was rumoured to be buying German giant Vobis. The ailing retailer is struggling because of an aggressive German price war.

Siemens Nixdorf sold its ten per cent stake in May to the retail and distribution group Metro, which became sole owner. However, Metro's acquisition was seen as a precursor to the sale, to concentrate on its department stores and hypermarkets.

An alliance between Dixons and Vobis collapsed in 1994, following the retailer's ill-fated attempt to launch its stores in the UK.