Action cuts Web prices as profits sink

Operating benefits of dotcom channel

Action Computer Supplies has cut prices on thousands of products sold through its Web site to try and keep up with online PC sellers. The London reseller today reduced prices on 18,000 IT products and services sold on action.com. It claimed the move would make its kit sold on the Web up to 30 per cent cheaper than typical high street prices. It was unable to say how big the average price cuts were, but George Laplante, Action MD, confirmed they were "significant" in areas such as networking, but less for PCs. Laplante told The Register that the move was a "response to Web companies like buy.com" selling PCs cheaper than in the high street. He believed Action's price cuts would bring it into line with these online PC sellers. Laplante expected the cuts to speed up the company's shift from mail order to selling over the Web. And he added that accusations about Dixons' anti-competitive behaviour had also played a part in today's move. "Action is now seeing the real operating cost benefits of its dotcom channel. Transactions over the Internet are significantly cheaper than through conventional channels," the company stated. 21 per cent of Action's total monthly sales are currently generated online, according to Laplante, accounting for £66 million annually based on March 2000 sales. This was a growth of 38 per cent on the second half of last year. Today's announcement came as the company reported a drop in profits for the first half of its financial year. Pre-tax profit was £400,000 for the six months ended February 29 2000, down from £2.7 million for the same time last year. Sales fell slightly to £137.6 million from 140.9 million. "Last year was difficult, but we have stabilised the company since the merger (collapse)," said Laplante The company said it expect sales growth to return now that Y2K worries were over and saw a "satisfactory outcome for the full year". ® Related stories Action steals finance director from MFI Action to ditch paper for Net Insight deal no big deal, says Action man Action suspends shares – again

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