Dixons, the UK's dominant computer and electronics retailer, is "making little or no money" and is expected to shut up to half of its 329 high street stores.

At any rate, that's what retail analyst Tony Shiret of CSFB is telling The Observer. He reckons that the cost to Dixons for its high street presence is up to 15 per cent more expensive per square foot than Next, the clothes retailer, yet margins are 20 per cent lower, due to electronic goods price wars.

Tougher competition from supermarket chains, falling income from warranties, and upcoming rate and rent reviews are all putting the squeeze on Dixons high street performance, The Observer says.

Dixons says Shiret's analysis is "speculation". The company is currently trialling a bigger retail format, called Dixons XL in four city locations.

The group also owns PC World, and The Link, the mobile phone retailer. It publishes financial results on Wednesday, Jan 14. ®