Dixons looks to new tech for festive uplift

Dixons' chief executive John Browett said: "It is clear to us that new technology sales will be strong at Christmas, but we are not expecting an easy Christmas, we think it is going to be very competitive."

He believes top sellers will include a new range of iPods, LED TVs and bridge cameras. All these products are being backed by the company's new brand advertising campaign featuring Star Wars robots R2-D2 and C-3PO.

The group, which also owns Currys and PC World, reported a narrowing of first-half losses and said its recovery strategy is on track.

Like-for-like sales in the UK and Ireland rose by two per cent in the first half of its financial year, down from the six per cent improvement reported in the first quarter, helped by strong demand for TVs during the World Cup.

The group said it had outperformed a tough market and slashed underlying losses in the half year. Losses were down from 16m to 10.7m in the UK and Ireland.

Dixons has refitted 250 stores, with 25 launched under the megastore format across the UK. These new format stores – which include 57 combined PC World and Currys outlets – are adding around four percentage points to like-for-like performance.

As well as the difficult UK environment, the group's 28 stores in Ireland are also seeing dampened consumer demand amid the country's economic woes.

Dixons said Irish stores returned to positive like-for-like sales growth in the first half, but customer confidence has been hit in recent days.

Kate Calvert, an analyst at Seymour Pierce stockbrokers, said the group's figures were at the top end of market expectations.

"These results confirm that, despite the economic backdrop, the transformation strategy is progressing well," she said. "We believe the product cycle remains good, helped by digital convergence, with a stream of new products such as 3D TVs."

Group pre-tax losses more than halved to 7.9m from 17.6m a year earlier. Dixons confirmed it is on target to make savings of around 50m this year as part of a three-year plan to trim 150m.