Pan-European electrical goods retailer DSG International became the first large high-street shop to report a big profit drop following a Christmas season that saw more shoppers than ever before turn to the internet to hunt down and buy bargains.
In an unscheduled trading statement, DSG, formerly Dixons, said it would miss analysts' forecasts by up to £50m due to a drop in sales of computers and weaker-than-expected demand for laptops. Analysts had been expecting the group, which owns Curry's and PC World, to report profits between £290m and £300m for the year to April.
FootFall, a subsidiary of credit agency Experian that counts consumer visits to physical shops, said more were shopping "tactically" to take advantage of discounts and online offerings. Its figures for December showed a 2.8% drop in shopper numbers compared to 2006, and a month-on-month increase of just 6.5%. This confirmed the underlying trend of falling footfall seen throughout 2007, it said.
Experian spokesman Martin Davies said the traditional six-week seasonal shopping period replaced with just two peak weekends and increased internet shopping. "However, falling footfall does not necessarily mean falling sales," he said. Consumers can now buy from the internet, supermarkets or retail parks where everything is contained under one roof.
Actinic, a retail analyst, said its survey of 34 UK retailers showed a 27% rise in the number of customers buying online last Christmas compared to 2006. Internet sales were up 46%, suggesting more consumers are happy to spend more online.
E-commerce was making a greater contribution to the bottom line compared with other channels, it said. Companies that traded both online and offline, reported that on average, just over 50% of sales in November and December were made online, compared with only 30% in 2006.