Online sales rose 72%, but retailers warn of the impact of closing stores
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Dixons Carphone’s online sales rose when the British started massively getting ready to work from home by shelling out notebooks, printers and – to keep kids happy – game consoles, in response to the spread of COVID-19.
The retailer said web sales rose 72% year-on-year in the first three weeks of March, with buyers also purchasing TVs, refrigerators, freezers and other kitchen appliances as they prepared to close the hatches for next few months.
The UK and Ireland Electricals rose 35% in total over the three weeks through March 21, including the online rebound, Dixons said today. International sales increased by 8% compared to those. Overall, the group’s electrical sales increased by 23%.
“Online trading has been very strong in all countries for the past two weeks as people have been preparing to work from home and to use essential technology to continue their lives during the coronavirus epidemic,” said Dixons.
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As of the evening of March 23, British Prime Minister Boris Johnson has ordered a blockade across the country which has forced the closure of all non-essential stores, including Dixons’.
“The first signs are that this strong [online] the negotiation has continued since the stores closed and will help offset the loss of sales, “added the company today.
The only area in Dixon that continues to struggle – as demonstrated by last week’s dramatic confirmation that 531 independent stores of cell phone warehouses must be closed and 2,900 roles made redundant – is mobile, down 23% in the three weeks since 21 March to 15 and down 15 percent for the 11 weeks until that date.
For those 11 weeks, the group increased revenue by 4%: the United Kingdom and Ireland Electricals increased by 10%, including a 23% increase in Online; International rose by 5%; Electricity grew by 8% in total.
Now begins Dixons’ long and tough slogan to compete with retail web monsters including Amazon. Dixons brick and mortar stores are predicted to lead to £ 400 million in sales for the remainder of the financial year and, although it has hopes of an email, “overall the loss of sales will have a negative impact. on our profitability and our cash position for the whole year. “
The money will be “preserved” to an extent with costs cut by around £ 200 million per year from government suspension of business rates and employee wage support, with up to £ 2,500 paid by the state for staff who are been fired.
Dixons said it will also use “discretionary spending checks” to reduce marketing and other overhead expenses, reduce inventory ordering, will defer VAT as agreed with the government and may not pay a final dividend to shareholders . The company has two revolving credit lines and has stated that it has “sufficient funding capacity”.
Fasten your seat belts, Dixons. It’s going to get bumpy. ®
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