Currys has reported a drop of 5% in its like-for-like sales in its ten week Black Friday and Christmas trading period ending 8 January. The electricals retailer stressed that it was still up 4% against the same period in pre-pandemic 2019/20. Currys also reported that it had gained market share in the electricals market, attributing it to growth in gaming and large domestic appliances. As a result of the challenging trading, Currys lowered its full-year profit guidance from £160 million to £155 million.
Alex Baldock, chief executive, said: “Currys came through this market turbulence well. We gained share in the UK, extending our market leadership. At the same time, we focused on profitable sales, with good discipline on margin, cost and stock.”
Mintel comment:
“The drop-off in sales was felt across the electricals market in the past quarter. Foremost in this, supply chain issues saw disruption in product availability and lead times. Indeed, 50% of consumers that purchased electrical goods in the past year are more concerned about stock shortages now compared to before the outbreak. This was perhaps no clearer than in the high-demand gaming sector, blunting sales at the top of the wish list for many.
For multichannel retailers, such as Currys, this was then compounded by rising anxiety around the Omicron variant. Which, starting in early December, saw many stay away from the high-street in the crucial build-up to Christmas. Even before this, just 32% of consumers purchased electricals in-store in the past year; dwarfed by the 80% buying online. Although well-positioned online, this saw heightened competition for sales; allowing pure-players to again steal a march on demand. With 59% of electrical buyers more confident in purchasing from an online-only retailer now compared to before the outbreak.
Even then, challenges in the golden quarter only saw a slight adjustment in profit expectations. While Curry’s position as the UK’s leading specialist and an outright favourite remains unshaken. However, it is fair to say that the biggest challenges lay ahead. Looking at other retail sectors, continued disruption in supply chains will likely see price hikes in the coming year. A development which could fragment spending in a very price-sensitive sector. Not least against the backdrop of broader inflation and already squeezed household finances. This will maintain the spotlight on value, through price-match guarantees, promotions or loyalty schemes. Or newer behaviours such as refurbished ranges and repairs. The electricals market will be discussed in detail in Mintel’s upcoming Electrical Goods Retailing – UK 2022 Report.”
