Dixons chokes on Christmas turkey

Customers stay away in droves

Shares in Dixons slumped in early morning trading after the high street electrical retailer revealed it had experienced a very unhappy Christmas.

Dixons' share price slipped 20 per cent (29p) to 118p after the company admitted that sales in December were "below expectations".

This was due mainly to weaker sales of games consoles, audio products and extended warranties. However, sales of computers, widescreen TVs and DVD players - especially in the sales - proved a little more encouraging.

Sales in the UK for the eight weeks ended January 4 grew by 6 per cent but were flat on a like-for-like basis.

Publishing its interim results today for the 28 weeks ended November 9 2002, pre-tax profit increased 8 per cent to £94.8m on turnover of £2.6bn.

However, following the disappointing Christmas it seems forecasts for full-year profits are being downgraded to around £300m, down from around £320m.

In a statement Dixons chairman, Sir John Collins, said: "Trading in the UK over the Christmas period has been below our forecasts.

"With an increasingly uncertain economic outlook and consequent risk to consumer confidence, we are cautious about the near term outlook for our markets.

"We therefore expect that the results for this financial year will be below current market expectations," he said.

Some market watchers are viewing Dixons' performance as a key economic indicator for the wider UK economy warning that this could signal a retreat in consumer confidence. ®