Currys reveals slow festive sales as consumers remain ‘hard-pressed’

Currys has revealed its sales slipped over the crucial Christmas period as some consumers held back on big-ticket purchases, and the use of credit including “buy now, pay later” hit a record high.

But the electricals retailer said its profit for the year is likely to be higher than previously expected despite challenging conditions.

The firm reported a 3% decline in sales over the 10 weeks to January 6, compared with the same period last year, which it describes as a “peak” trading period because it covers the Black Friday sales and busy festive shopping season.

Mobile phones sold well over the period, but it was offset by weaker sales of TVs and computers.

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Chief executive Alex Baldock said people in the UK are still “hard-pressed” as the cost-of-living crisis rumbles on, with consumer confidence getting better but remaining “bumpy”.

This means the retailer has seen some people continuing to be restrained when it comes to big-ticket purchases.

But squeezed budgets have also driven more people to opt to prolong the life of their gadgets, rather than replace them, which Currys said has benefited its servicing arm.

He said “bundles” also sold well, whereby people buy a product such as a TV and add on item like a TV stand and bracket, all in one purchase.

Furthermore, the company said credit adoption had reached a record high, making up more than a fifth of purchases, with 2.2 million customers actively using its flexible credit options.

That includes the option to pay in monthly instalments, which includes interest, or “buy now, pay later” within a year, without interest.

Demand for credit and repair services have been higher as more people find ways that “help them afford expensive products”, Mr Baldock said.

The firm said it was expecting its adjusted pre-tax profit for the year to be between £105 million and £115 million, higher than prior expectations, after making cost savings across the group.

Mr Baldock said its financial performance has improved even know its “markets may be no easier”.

The boss said the business was monitoring the disruption in the Red Sea caused by attacks on cargo ships, which some retailers have warned could lead to shipping delays and higher costs.

“As it stands, we’re not expecting significant disruption, but clearly we’ll keep a very close eye on it,” Mr Baldock said.

He also criticised the Government’s decision to raise the National Minimum Wage from April, which he said is “adding to an already overburdened sector”, on top of higher business rates and “misjudged” recycling proposals.

“Loading these new costs onto retail at this time is simply going to be counterproductive, it is going to fuel inflation, reduce investment, reduce jobs, and it is not going to achieve the objectives that it set out to,” he said.