Dixons Carphone has become the latest retailer to reveal a festive sales hangover after it said Boxing Day demand for electrical goods failed to live up to the promise of Black Friday.
The high street giant – which brought forward its Christmas trading update as it also named a new boss – disclosed that its mobile phone business remained under pressure as well.
Like-for-like sales in the UK and Ireland rose 3% in the ten weeks to 6 January compared to the same period last year, but the statement revealed a squeeze on profit margins at the group, which owns Carphone Warehouse and Currys PC World.
However, despite a tough market it was buoyed by demand for the latest iPhone as well as the performance of its Greek and Nordic divisions and latest profit guidance was little changed from previous consensus.
Overall group like-for-like sales were up 6%. Shares were 1% higher in early trading.
The company confirmed that Alex Baldock, head of Very.co.uk and Littlewoods owner Shop Direct is to become chief executive in April.
He replaces Seb James, who is leaving after six years to take over at high street chemists Boots – as first revealed by Sky News over the weekend.
Image: Carphone Warehouse has been struggling with a tough mobile phone market
Mr James’ departure comes after a slump in half-year profits was blamed on a tough mobile phone market – with squeezed customers inclined to hold onto old handsets for longer.
The group saw a boost in November with record Black Friday trading but over the whole Christmas period the picture was affected by what Mr James called a “more cautious consumer environment”.
That sentiment was mirrored by a household finance poll from IHS Markit published on Monday, showing British households turning gloomier about their finances in January as they worried about future inflation and relied more on borrowing.
Mr James said that in UK and Ireland “our Boxing Day did not quite mirror the promise of our very strong Black Friday week, but we are very confident that we grew market share in pretty much every category”.
He said sales growth was driven by big screen TVs and small domestic appliances plus mobile and gaming.
Electricals were up 1% and mobile up 8% thanks to the iPhone X.
Image: Chief executive Seb James is to leave the company
But Mr James said market conditions meant that its profit margins in the mobile phone business “continue to be challenged”.
Margins were also squeezed in electricals due to “channel mix” – the choice of platform via which customers make purchases, which is increasingly online.
The group narrowed its expected full-year headline profit figure to a range of £365m to £385m, having previously pencilled in £360m-£400m.
Mr James said: “Looking forward we continue to keep our antennae twitching for any material change in consumer behaviour, but remain relentless on our focus on providing the best value, choice and service.
“For the remainder of this year we have a early Easter, a new Samsung phone and the first week or two of our World Cup promotion to look forward to.”
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The festive sales period has proved a mixed bag for retailers with Next doing better than expected but rivals M&S seeing sales fall.
Supermarkets appeared to have had a better time than fashion stores as shoppers focused on essentials though Sainsbury’s, owner of Argos, saw a drag from general merchandise sales.