Dixons Carphone on Thursday reported another big fall in mobile phone sales across the UK and Ireland in its latest quarter, though it maintained its financial guidance for the full 2019-20 year and said its turnaround was on track. The Irish arm of the UK group said it experienced an "exceptionally strong first quarter".
Dixons Carphone has been hurt by a shift in the mobile phone market as customers keep their handsets for longer, choose cheaper SIM-only deals, and turn to more flexible credit-based offers.
In June the group said it would accelerate its response to the changing mobile market after reporting a 22 per cent slump in annual profit and warned of another big fall in the current year.
The group, which trades as Currys, PC World and Carphone Warehouse in Britain, said like-for-like sales in its UK & Ireland mobile phones division fell 10 per cent in the 13 weeks to July 27th, its fiscal first quarter, having fallen 4 per cent in the last financial year.
"The mobile market is as challenging as expected, underlining the need for the decisive actions that we set out in June," said chief executive Alex Baldock.
Mr Baldock has renegotiated all of the group’s legacy contracts with network providers Vodafone, EE and O2 . He is also revamping the group’s mobile product range, including improved choice in SIM-only deals and flexible credit based bundles.
In Ireland, Mark Delaney, managing director of Dixons Carphone Ireland, said the group experienced an “exceptionally strong first quarter of 2019/2020”, with increased market share across all categories including TVs, laptops, mobile phones and white goods. Online sales also continued to grow on Currys.ie in the first quarter .
Mr Delaney said that the brand continues to invest in its bricks and mortar stores by creating “playgrounds for technology”. The latest superstore will open in Sligo later this year, ahead of the busy Black Friday and Christmas trading period.
“Trough year”
Dixons Carphone said first quarter like-for-like sales in its UK & Ireland electricals division rose 2 per cent, while sales in its international division on the same basis were up 4 per cent. Overall group like-for-like sales were flat - in line with analysts’ consensus expectations.
“The current political and economic climate is volatile but, assuming no material disruption from that, we stand by our full year guidance,” added Mr Baldock, who expects 2019-20 to be “the trough year” for mobile losses.
Industry data published on Tuesday showed British retailers saw their sales flat-line in August as shoppers cut back on non-essentials.
Economists say recent signs of a weakening in spending by households raise the risk of a recession as the country prepares to leave the European Union. – Reuters
