Dixons plugs into festive cheer

SALES growth slowed sharply at consumer electricals group Dixons as it battled for its share of consumer spending over Christmas. But the Dixons and Currys chains turned in strong performances, despite a drop in demand for 'big-ticket' items.

Top sellers included digital cameras, portable DVD players and iPod music players.

Chief executive John Clare had already warned of the slowdown, which saw like-for-like sales growth at the group fall from 5% in the first half to just 1% in the following eight weeks to 8 January.

The UK figure fell from 6% to 2% while overseas reversed a first-half rise of 1% to a 1% decline.

Star performer was the Dixons chain, which last year closed some poor-performing High Street shops. As the group competed 'robustly', underlying sales jumped by 9%, a big improvement on the 3% seen in the first half. Currys slowed, but still posted growth of 6%.

Worst performer was the PC World chain, which fell short of company targets with a 7% slump in like-for-like sales. Clare said there had been a healthy increase in the number of computers sold but price deflation was running at up to 20%.

The Link, Dixons' chain of mobile phone stores, also performed poorly, with flat sales over the period.

{2} Overall margins were down in line with the 0.7% drop seen over the first half. Underlying first-half profits were slightly ahead of expectations at £127.5m, up 15%, for the 28 weeks to 13 November. The dividend is raised 10% to 1.83p.

Clare is taking a cautious view of the year ahead, predicting 'more of the same'. He said: 'Higher interest rates are having an effect, as is the housing slowdown. The consumer is feeling a little less affluent and I don't see what is going to change.'

Despite the uncertainties, he expects Dixons to meet analysts' forecasts of around £345m for the full year.