Nightmare Christmas for High Street giants as falling sales spark profit fears


Last updated at 17:45 04 January 2008

girl with laptop

Falling sales and profit warnings are signalling a far-from-happy New Year for leading stores.

The Dixons group, which includes Currys and PC World, said profits could be £50million below expectations after disappointing Christmas sales of laptops and gadgets.

The company admitted profit margins had been cut as prices were slashed to bring in custom.

There has been City speculation that the group could be forced to close up to 200 of its 700 stores, although this was denied by company bosses yesterday.

The fashion chain Next revealed that sales from its shops fell 3.2 per cent in the five months to December 24 compared to the same period a year earlier.

The bad tidings from two household names raised suspicions that similar poor trading and profits figures will be revealed by other stores over the next few weeks.

Shares in Kingfisher, the owner of B&Q, were marked down by more than 7 per cent while Home Retail Group, which owns Argos and Homebase, fell nearly 7 per cent.

Marks & Spencer was also down more than 3 per cent.

The owner of Comet, Kesa Electricals, was down by 8 per cent, while shares in the jeweller H Samuel lost 7 per cent.

The problems at Dixons and Next highlight a fundamental shift in shopping habits as more customers shop on the internet rather than the High Street.

Although both firms lost out in sales from their shops, they could take some comfort from a significant increase in Web sales.

Figures published by retail research group SPSL yesterday show the number of shoppers on the street in December was down by 3.2 per cent on 2006.

The Dixons group said sales in stores were down by 1 per cent during the 11 weeks to December 29 compared to the same period in 2006.

The biggest problems were seen at PC World, where sales were down by 10 per cent compared to the year before.