Tablet PCs, cheap fashion lift UK retailers
By James Davey
LONDON (Reuters) - Trading updates from six major British retailers on Thursday demonstrated that the must-have gadget, cheap fashion and internet sales were key to overcoming an otherwise tough Christmas.
Consumer spending generates about two-thirds of Britain's gross domestic product, but job insecurity and a squeeze on incomes has put shoppers under pressure, which in turn has given retailers a rough ride, pushing music retailer HMV, camera store Jessops and DVD rental firm Blockbuster into administration over the last week.
But Thursday revealed a few bright spots, with Dixons Retail, Europe's second largest electricals retailer, selling five tablet PCs a second in the week before Christmas and beating analysts' forecasts with a 3 percent rise in group like-for-like sales.
"This Christmas everybody wanted a tablet," Chief Executive Sebastian James told reporters.
In the 12 weeks to January 5, Dixons' fiscal third quarter, the firm sold "well over 1 million" tablets, he said, with Apple iPad, Samsung Galaxy and Google Nexus the most popular lines.
Though gross margins fell, Dixons said it would meet year profit forecasts.
Argos owner Home Retail, which in October unveiled a plan to reposition its catalogue-led business to a mainly online operation, raised its year profit forecast, pushing its shares up 15 percent.
Argos, which also saw strong demand for tablets, posted better-than-expected third quarter like-for-like sales growth of 2.7 percent. Continued...