Carphone Losing Ground

Jun23

Dixons Carphone is set to close up to 92 Carphone Warehouse stores by the end of this year as they face ongoing challenges in the UK mobile phone market. The company says that due to changing consumer behaviour like less frequent upgrades and the increased popularity of SIM only tariffs have contributed to declining margins and flat sales in the company. Its UK revenues are down 1%, but their Group revenue grew 3% due in part to success in Nordics and Greece.

Dixons Carphone CEO Alec Baldock, who joined in April this year, says “eight weeks in the business have cemented my optimism about Dixons Carphone’s long-term prospects. I’ve found exceptional strengths, and though there’s plenty to fix, it’s all fixable.” He added, “We’re number one in each of our markets, with people and capability no competitor can match. Our opportunity lies in making the most of those strengths, which we are nowhere near doing. And we must: nobody is happy with our performance today.”

Baldock said the company’s increased use of data analytics coupled with new technology and better marketing are the main priorities, along with Dixons Carphone planning to “address underinvestment” in the employee and customer experience. He also claims the company is “making progress” in its contractual discussions with the mobile operators about the improvement of business conditions.

Carphone Warehouse has been the only major retailer to offer services for all four of the major mobile phone operators since the collapse of Phones4U in 2014. Baldock said “right now, with our international business in good shape, we’re focusing early action on the UK. In electrical, we’re focused on gross margin recovery. In mobile, we’re stabilising our performance through improvements to our proposition and network agreements. In both, we’ll work hard to improve our cost efficiency.”

It may seem like Carphone Warehouse is losing ground, but Baldock seems to be reassuring us with solid plans, we’ll keep an eye and see how it pans out.

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