Too soon to see Best Buy’s impact

Aside from Next, the big update next week will come from Carphone Warehouse which posts interim results on Friday.

The retailer’s most high-profile initiative this year has been the opening of the first big-box Best Buy stores in this country, in partnership with the US giant.

However, there is unlikely to be much detail about the success of that venture next Friday. The first store, in Thurrock, only opened in the spring and there are just four stores trading at present.

The grapevine suggests Best Buy is not having things all its own way here and has had more of an uphill slog than anticipated. Eyebrow-raising promotions, such as price cuts during the August bank holiday, suggest that possibility. And the incumbent electricals groups are determined to deliver a bloody nose to Best Buy.

Market leader Dixons’ improvement programme has been very successful so far, and its megastores hold their own against Best Buy. And Kesa-owned Comet, after a period of apparent inactivity, has put its foot on the accelerator with rebranding and a determined attempt to show a clear point of difference.

Given the small scale of the Best Buy big-box enterprise at present, it’s unsurprising that Carphone does not want to go into a great deal of detail just yet - no matter how much some observers might like it to.

Although Best Buy has made the headlines, it is Carphone’s core operations that remain the motor of the business at present and there are few signs that performance is slowing. The retailer’s share price has climbed this year, helped by consumer enthusiasm for smartphones and the success of Best Buy Mobile, the retailer’s US venture which has been going like a train.

Assuming the pace is kept up in the core business then Carphone will be insulated from the start-up costs of UK big-boxes, which, in the absence of evidence that they are shaking up the status quo, may make headlines on the back of rising losses but are not - so far at least - a cornerstone of the business.

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