Dixons hit by double-digit sales slump

UK revenues tumble as retailer warns of deterioration in consumer confidence

Dixons Retail has issued a profit warning as it announced a slump in UK and Ireland sales and hinted it may offload its Spanish business.

According to a trading statement issued this morning, UK and Ireland sales in the 11 weeks leading up to 26 March tumbled 11 per cent on last year on a like-for-like basis.

Chief executive John Browett, said: "Consumer confidence across some of our markets is fragile and we expect it to continue to be so through much of 2011."

The London-listed electricals giant set out a four-step action plan designed to respond to the weakened demand, including focusing on "winning markets".

As part of that, Dixons said it is entering a consultation process to consider its options in Spain, including the potential for exit.

The other three prongs of the strategy comprise capital expenditure on high-return projects, cash generation and additional cost-reduction initiatives.

Dixons now expects to achieve an underlying pre-tax profit of £85m for its financial year to 30 April, excluding Spain.