Low times on the high street
Dixons Store Group to remove the Dixons brand from the high street and operate solely online
There was more upset on the high street last week, as Dixons Stores Group (DSG) announced that it would be removing its Dixons brand name from every Asbo-ridden town centre and Americanised shopping mall in the UK.
Instead, the firm intends to operate Dixons as an online e-tailer only, and maintain the shopfloor space under the Currys.digital brand name.
After 70 years in our high streets, it is sad to see one of the best-known electrical retail brands disappear. But the move is a sensible one for DSG. Despite the upturn for other retailers such as Marks and Spencer (which being patriotic, I’m happy to say has recently had a wonderful resurgence, reporting Christmas sales up 2.9 per cent on the previous year and food sales up eight per cent), life is still tough on the high street.
The CBI reported that sales were down on the high street for March, for the third month in a row. Not only that, but Christmas once again failed to live up to the dizzying heights that are so often promised as the cure for a slow sales year. Compare this with sales over the web: sales up by 50 per cent in the run-up to Christmas last year compared with the previous year, and online shopping was up 32 per cent for the year than in 2004.
DSG group, whose pre-tax profits were down for the six months to November to £106.1m from £133.5m a year ago, is right to try and consolidate its branding. It is hard enough to operate one brand name in the high street retail space, but two almost competing brands presents a massive challenge.
However, this does not mean that Dixons will find it any easier to operate online. It has always had an online presence, but this move does not automatically mean that people will now go there any more than they did previously. And competition from the likes of Dabs, WStore, Insight, and eBuyer – to name but a few – makes the sector highly aggressive to compete in, even for a firm with the marketing and brand might of Dixons.