Following today’s release of Currys’ figures for the 10 weeks ending 6th January 2024; Oliver Maddison, Retail Analyst at GlobalData, a leading data and analytics company, offers his view: “Currys experienced another difficult peak trading period, seeing group like-for-like (l-f-l) sales fall by 3% as cash-strapped consumers sought to cut back on big-ticket purchases. Despite this, it was able to upgrade its profit guidance to between £105m and £115m from £104m, in part due to its strategy of focusing on profitable sales. Meanwhile, upstart UK rival Marks Electrical continued to see significant sales growth over the final three months of 2023, growing 17.8% as consumers continued to take advantage of its low-cost and convenient offering. However, this was at the expense of gross margins which took a hit as its costs rose, whereas Currys’ margins in the UK and Ireland business remained “stable”, owing to strong growth in its services offering. Greater competition on price and delivery would support Currys in competing with this increasingly important rival.
“Consumers were reluctant to spend on less essential upgrades of their electricals, with sales of TVs being weak in both the Nordics and the UK and Ireland. In the same vein, the Nordics saw strong sales in domestic appliances as consumers prioritised essential purchases. Meanwhile, the UK and Ireland business saw the strongest growth in its mobile and services offerings, with the number of iD Mobile subscribers growing 29% and the uptake of its Care and Repair warranty increasing by 1.7ppts. The 2.4% growth in uptake of credit options to a 20.6% adoption rate buoyed sales, as more consumers opted to make purchases on credit as they felt financially squeezed.
“The retailer’s Nordic arm, Elkjøp, saw a significant increase in its margins, and its 2% l-f-l sales decline was slightly less than the group total, indicating a degree of success in its aim to return to growth in the Nordics, particularly Norway. Meanwhile the group’s Greek business, Kotsovolos, the sale of which is expected to complete before the end of FY2023/24, saw a slightly weaker performance, with l-f-l sales declining by 4%. The sale will enable the retailer to re-focus on its core businesses, ensuring greater competitiveness in the future.”
