As we have previously reported that the collapse of electrical specialists Comet could leave 6,000 staff jobless by Christmas. However, for Comet’s top rivals the closure of so many branches provides an opportunity to expand their customer base.
Comet’s difficulties present an opportunity to rivals Dixons Retail
Dixons Retail is one chain attempting to benefit from the demise of its rival, with chief executive Seb James leaning heavily on the high standard of customer service his Group provides in order to entice Comet customers into their stores.
He said; “We think our offering is well suited to those customers shopping at Comet.
“Those customers will be pleasantly surprised at how good we have become at providing good service.”
Although Dixons Retail, which owns both the PC World and Currys brands, may face an element of sales disruption during the current period due to Comet selling off its remaining stock at heavily discounted prices, there is a strong likelihood that consumers will turn to the fallen retailer’s closest rival once the remaining stores have closed down.
Yet there is also a risk that, due to the rising popularity of internet and smartphone shopping, consumers will simply decide to abandon the high street altogether and turn to e-retailers for their technological needs.
Many ex-employees of Comet branches across the UK are certainly grateful to the rival brand, as so far 171 have gained full-time positions in Dixons stores after losing their jobs. Dixons is also looking to recruit a further 1000 temporary workers thanks to the busy Christmas period.
Perhaps with the collapse of Comet, Dixons Retail will be able to post a more positive sales report at the end of the full financial year than it did for the first six months trading.
In the 24 weeks to October 13th, UK and Irish like for like sales managed to climb 3 per cent, but did not manage to offset losses made in French online retailing business PIXmania. As a result of this drop in popularity, which led to the value of PIXmania being written down by bosses, the Group sustained a £22.2 million loss over the period.
However, this does indicate that things are beginning to improve for the Group, as in the same period a year before losses totalled £25.3 million.
Hargreaves Lansdown Stockbrokers equity analyst Keith Bowman says; “Dixons continues to underline its survivor status.
“While arch rival Comet remains in a critical condition, a combination of initiatives including cost savings, store revamps and an ever greater emphasis on its online offering are driving the Group’s recovery.
“On the downside, consumers remain pressured, competition is intense, with the company battling the likes of Amazon, whilst economic conditions for much of the Group’s Southern European division are still highly challenging.
“Nonetheless, Dixons has come a long way.”
Do you think the demise of Comet will encourage consumers to jump ship to Dixons Retail, or will the low prices offered by many internet retailers persuade high street shoppers to convert to the online marketplace? What other methods could Dixons Retail use to encourage consumers into their stores, rather than simply relying on customer service and the administration of their main rival?
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