Dixons cautious despite "solid" Christmas

Sales down amid warnings of "fragile consumer confidence" but retailer claims it is still outgunning rivals

Dixons has hailed "a solid performance" over the Christmas period but is conscious that the consumer market "remains fragile".

For the 12 weeks to 7 January, which roughly translates to the high street giant's third fiscal quarter, total group sales fell three per cent in sterling and five per cent on a like-for-like basis.

UK and Ireland revenue fell six per cent in pound terms, while the firm grew sales in the Nordics and central Europe by eight per cent. Sales in southern Europe were affected by the volatile economic climate and fell 12 per cent annually in sterling.

Dixons claimed it showed "strong growth in multichannel sales" during the period, and that almost a fifth of total revenue is now generated online. The retailer reckons its "UK and Ireland trading [is] ahead of competitors" and that sales of its after-sales support service Knowhow, which launched last year, are "strong".

Stock turnaround is reportedly improved, with stock levels reduced seven per cent on last year. Gross margins were flat on Christmas 2010 levels.

John Browett, group chief executive of Dixons Retail plc, said: "This is a solid performance against a challenging backdrop. Our service-led business model continues to win over customers in all our key markets. Consumer confidence in many of our markets remains fragile and we will maintain a cautious approach to the outlook for the year ahead. We have set our business accordingly and will continue with our self-help strategy to improve the offer for customers."