'Phones 4U exit will not benefit indie retailers' - PC Retail

'Phones 4U exit will not benefit indie retailers'

But it's good news for big chains like Dixons Carphone and Tesco, claims analyst
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The exit of Phones 4U from the market would not have a notable impact on independent computer retailers and resellers, says analyst Kantar Worldpanel.

"It is unlikely that independent technology retail businesses will experience a significant uplift as a result of Phones 4U’s exit," Fiona Keenan, strategic insight director at Kantar Worldpanel, told PCR.

"Consumers are much savvier now than they have been in the past and increasingly look online to compare the best deals. Online now accounts for a third of handset sales and independent retailers are less likely to be able to be as price competitive as larger vendors, or have the infrastructure in place to compete in this space.

"While independents may pick up a small amount of custom from passers-by who no longer have a Phones 4U shop on their High Street, it is unlikely to have a large impact on their businesses overall."

However, Keenan added that bigger chains would benefit from Phones 4U's withdrawal from the market.

“While Phones 4U’s departure from the market will result in less choice, and ultimately less competitively priced products for consumers, it’s good news for retailers such as Carphone Warehouse and Tesco," she commented.

"Some 90 per cent of Phones 4U’s handset sales this year were on contract agreements which Carphone Warehouse and Tesco are well placed to pick up – more so than online giants such as eBay and Amazon which only offer handsets.

“Retailers vying for Phones 4U’s business will be pleased to know that more under 25 year olds will now be available to target as they made up a quarter of Phones 4U’s business this year.

"These customers are looking for affordable, lower cost contracts that appeal to their appetite for social media, with 66 per cent saying that their mobile is key to their social life. Retailers should look to data bundles and deals to attract this audience.”

Phones 4U went into administration yesterday after phone network providers EE and Vodafone cut their contracts with the chain, putting 5,600 staff at risk.

Dixons Carphone later said it would be willing to help Phones 4U concessions staff affected by offering them jobs.

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