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Like-for-like drop within expectations, while early Jan sales grew

Dixons xmas sales drop 5%, buoyed by tablets

UK retail group Dixons has taken a five per cent drop in like for like sales over the festive period – a drop it attributes to the VAT rise last year in the UK, particular economic turmoil in Italy and Greece, and the more general ‘challenging’ fiscal conditions it has cited in the past.

The drop is well within analysts’ expectations, some of which inferred the numbers would be worse.

The figures, which take in the 12 weeks ending January 7th, also clocked an increase in online sales, which now account for 19 per cent of the group’s business.

We’re reliably informed sales were kept at their relative buoyancy by a festive surge in iPads, Kindles and other tablets, headphones and, more surprisingly, coffee machines.

As by far the UK’s largest tech retailer (more noticeably now Best Buy has retreated back across the Atlantic) these sales can be used as a fairly strong indicator of the tide of buying habits in consumer IT. Specifically the surging popularity of tablets and the products that support them, presumably at the cost of more traditional PC sales.

Drilling down to find some positive figures, the firm also revealed that like for like sales were actually up 23 per cent between January 4th and 14th, reflecting a strong January sales period.

The Northern European division, where the wider economic situation is fairing somewhat better than the south, also racked up three per cent like for like sales growth.

John Browett, group chief executive 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. We have made significant progress with KNOWHOW and see further opportunities to develop our services offering. Our multi-channel offer is going from strength to strength with customers appreciating the benefits of our Reserve & Collect model

"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. Our Renewal and Transformation plan is continuing to make the business better, easier and cheaper to run and delivering an unbeatable combination of Value, Choice and Service for customers.”

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