A raised profit outlook, higher Christmas sales and an improvement in the Nordics market, Currys recorded strong growth over peak trading.
The electricals giant reported a 2% revenue growth in the UK, resulting in an increased profit outlook for the full year of between £145m and £155m.
Chief executive Alex Baldock was upbeat regarding the performance, noting that drones, AI laptops and premium mobiles all sold well in the period.
GlobalData retail analyst Oliver Maddison said that while Currys achieved “modest growth” in the period, it continued to outperform most of the wider electricals market.
He said: “Its position as the UK’s only large omnichannel electricals specialist played to its advantage, with its results proving substantially stronger than The Very Group’s 2.1% decline in electricals sales over the seven weeks ending December 27, 2024.”
As a leader in the UK electricals market, how is Currys planning to maintain its position in 2025 and battle with budget headwinds, economic uncertainty and wavering consumer confidence?
Products and prices
Mobile, gaming, and premium computing produced strong sales over Christmas, with Baldock later adding “coffee machines, health, beauty and fitness” products saw substantial growth.
This is expected to keep being popular with consumers this year, as well as a “super size” TV trend despite a weaker demand for televisions over Christmas.
“It used to be that 75-inches was a big TV, now it’s 98-inch plus which is the fastest growing of that market,” he explained.
“This took off in Germany and it’s coming to the UK. Currys has the delivery and installation capabilities for this, and it’s not done yet as even 120-inch TVs are coming.”
As it prepares to bring in giant TVs, it is also prepared for the impact of the Budget. Baldock said that some price rises are “inevitable” and that the retailer is facing over £30m of extra costs as a result of “unhelpful government decisions”.
He emphasised that he will aim to keep the rises “to a minimum”, adding that its price promise means “consumers won’t get their technology cheaper anywhere else”.
While we don’t know where these rises could be or how much it will rise by, he did say Currys has worked out to mitigate a lot through “cost efficiencies of our own”.
“We’ve shown that we can prosper in a difficult environment,” he said.
“Improving the performance of Currys and strengthening our performance in recent years has happened with no help at all from the outside world.”
Automation and people
Of the remaining added costs, Baldock explained this would mean more automation and offshoring.
“At the moment, we’re rolling out electronic shelf edge labelling in our stores. We’re getting to about 100 of our UK stores this year and that saves colleagues a much-disliked job and improves the efficiency as well.
“You can expect initiatives like that to accelerate as people’s costs are inflated by government policy. We have to make ourselves more cost efficient and you can expect to see more automation in our logistics and our supply chain.”
In terms of offshoring, Baldock explained that there are around 1,000 colleagues in India and this is forecast to expand as labour costs of UK employees inflate.
Automation and offshoring doesn’t mean there’s no room for UK colleagues as he made assurances that Currys actually wants to employ more people, but it is unlikely.
“The national insurance tax doesn’t benefit the colleagues at all, it depresses hiring and boosts offshoring and automation”
“Retailers are people-centred businesses so it is very difficult at the moment. We want to be powering growth, investing more, and not be held back from doing so.”
The question of job cuts was shut down by Baldock, as he said there are no plans to do so as Currys is focused on “growing the business”.
Moving forward, it seems Currys has all the right tools in place to maintain its status as a leader in electricals despite curveballs thrown by the Budget.
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