The difficult financial and economic climate that we have seen over the past couple of years in the United Kingdom has resulted in many problems for retailers, especially brick-and-mortar stores. The High Street has taken a real battering as a result of the downturn, and whilst the recession may officially be over, retailers have continued to see things plummet in terms of sales and profits.
The UK is known to be a gadget-happy nation whose residents are eager to get their hands on the latest electrical devices, ranging from HDTV displays and Blu Ray players to smartphones and tablet PCs. However, despite the love for technology among the British public, electrical retailers such as Currys, Comet and Best Buy have been unable to escape the misery of High Street gloom that has erupted due to the economic downturn.
The extent of the damage that consumer electronics retailers have suffered recently was reflected in the figures that were recently posted by Dixons Retail, the company that owns PC World and Currys, revealing losses of more than £224 million. This comes as reports highlighted the worst trading figures for a year in June, increasing fears over store closures and job losses amongst employees within the retail industry as a whole.
The financial results released by Dixons came after a number of other gloomy reports relating to electrical retailer sales and profits. Last week saw Best Buy announcing a staggering £62.2 million loss in the UK, and there are reports that Kesa is considering selling the electrical chain Comet following losses of £9 million on its UK operations.
Speaking about High Street sales performance over the recent weeks Judith McKenna, Asda’s chief financial officer, said that High Street sales had started to fizzle out after a year of growth. She noted that consumers were now really feeling the impact of problems such as the soaring cost of living and pay freezes or job losses.
Electrical retail is said to have been one of the hardest hit sectors in the UK and in other parts of Europe. Consumers have been forced to cut back on the purchase of more expensive items such as the electrical gadgets sold by these retailers, which has naturally resulted in a dip in revenue and profit. Even established brand-name manufacturers are not spared in these tough times: earlier this week Royal Philips Electronics issued a profit warning, citing weak consumer demand as the cause.