Following its half-year results, Baldock discusses price increases and business costs arising from the Budget, business rates, products and services, and what the electricals giant expects from the Christmas period
In its results for the half year to October 26, Currys reported a 1% rise in sales to £3.91m and a growth in adjusted profit before tax to £9m after a £10m loss last year.
In a statement to the City, Currys boss Alex Baldock criticised the recent Budget, saying it would “add cost quickly and materially, depress investment and hiring, boost automation and offshoring, and make some price rises inevitable.”
Speaking this morning, Baldock reflected on the results and spoke further about the implications from the Budget and other policies, as well as Christmas, refurbished tech and AI products.
When will these “inevitable” price rises happen?
“On price rises, the one thing that will stay the same is that consumers will be guaranteed they’re not getting it cheaper anywhere else, but if they find it cheaper anywhere else we’ll match it. On inevitable price rises, my prediction is more across the retail sector, as we’ve heard this from some other retailers, and that’s just a reflection of reality. I mean, the scale and the speed of how these headwinds are hitting the retail sector do make some price rises inevitable.
“We will work hard to mitigate the impact of these headwinds by growing things like our B2B, our mobile and our AI products, by continuing to get behind them and grow as fast as possible. We’ve shown good cost discipline in the past few years and we’ve got absolutely no intention of letting that up.
“We all want more, more jobs. We want lower prices. We want more investment. We want more growth and we look for the conditions from the government to enable all of that.”
What do you make of what Labour proposed for the Budget and business rates?
“The short answer is that the promised rates relief has turned out to be nothing of the kind. Retail is an overburdened sector already. Retail pays more than its fair share in business taxation and pays an even more disproportionate share of business rates.
“If the government wants retail to power recovery, to power jobs, growth and investment as retail is exceptionally well placed to do, then we need fundamental rates reform and we need relief in the short term.
“This was an unhelpful Budget for jobs, prices, investment and growth. But I also understand that the government has difficult decisions to make and my job is to make sure that Currys is successful, whoever’s in power. We will continue to engage with the government on things like recycling proposals which, in fairness, this government has listened to and reversed course on things like making Amazon pay and not free ride on retailers like us who take recycling seriously. We’ve successfully argued for the importance of probation periods and look forward to continuing to engage with the government on that.”
How do you expect Christmas to perform?
“So far, it’s in line with expectations. I mean I’d say we were well prepared and we’re confident that we’ll be able to keep our promises of continuing to grow profits and cash flow this year.
“Air fryers are flying off the shelves, curved monitors and consoles are doing well. Hair stylers like the Shark five-in-one, noise-cancelling headphones, drones are flying – if you pardon the pun – and our 98-inch-plus TVs are also doing well. AI is a trend that’s building some momentum, both in laptops, where we enjoy over 75% market share, but also increasingly in mobile as well. So, there’s a lot flying off the shelves.”
Is there a demand for refurbished tech?
“That’s going really well and we want to be as famous for selling shiny new tech as selling refurbished tech and having repaired it. We’re lucky that we’ve got assets that no competitor realistically is ever going to replicate with Europe’s largest technology repair facility in Newark, with over 1,000 colleagues repairing everything from washing machines to to mobile phones.
“It’s great for customers because it gives their technology longer life and it’s great for us because we make money doing it, and it’s something hard for competitors to replicate. Repair customer numbers were up by 7% in this period and we expect to do more trade in, we expect to sell more refurbished products and we expect to do more repairs.”
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