Dixons says pandemic has led to permanent shift in use of tech

The coronavirus crisis has caused a permanent shift to people buying more tech, the boss of electrical goods retailer Dixons Carphone has said.

Chief executive Alex Baldock said "many people's eyes have been opened" to the uses of tech, including for home working and entertainment.

The comments came as Dixons reported that online sales more than doubled during the pandemic.

But he said Dixons planned to keep High Street shops despite the online shift.

Massive retailers such as Amazon and tech firms including Apple have seen surges in sales over the pandemic as people spent more time working, shopping and seeking entertainment online.

Amazon said in April that it hoped habits would stick after its profits tripled in the first three months of this year.

On Wednesday Dixons Carphone, which also owns Currys PC World, said online sales of electrical goods had grown 103% to £4.7bn in the year to 1 May, dragging up profits to £33m as its High Street shops were hit by coronavirus closures.

It predicted that people would continue to buy more technology goods after the Covid crisis.

• Amazon hopes pandemic habits stick after profits triple

• Surge in iPhone sales sees Apple's profits double

Mr Baldock told the BBC's Today programme that the change would be "structural" and "permanent".

"Many people's eyes have been opened by this pandemic to what technology can do for their lives: to keep them connected; and work from home; and keep their family fed, clean, entertained, and the like," he said.

'We like stores'

"Hybrid working is going to be normal for half of all office workers, and home entertainment is getting a bigger slice of people's entertainment spend," Mr Baldock said. "Gaming is now bigger than music and movies combined".

"The market is about a quarter larger than it was two years ago, and we expect a big chunk of that to stay," he said.

Human resources trade body the CIPD said in June that the majority of people who can do so want to continue working from home at least some of the time.

Its research suggested that about 40% of employers expect more than half of their workforce to work regularly from home after the pandemic has ended.

Despite the jump in online sales, Mr Baldock said Dixons Carphone had reopened 300 stores.

"We like stores," he said. "Yes, more customers are buying tech online, as they are buying many other things online, so it's very important to have a strong online arm... But the secret sauce for us is online and stores together, because that is still how most customers prefer to shop."

He added that Dixons Carphone had no plans to reintroduce mobile phone roaming fees for travellers to the EU, despite moves made by EE last week.

'More work to do'

Despite the firm's optimism, Julie Palmer, a partner at restructuring firm Begbies Traynor, said: "With [Dixons'] share price dipping since April, the pandemic-induced boom may soon be coming to an end.

"The soon-to-be Currys PLC will still have more work to do reshaping and enhancing its business if it is to return to pre-pandemic levels of growth," she said.

In March last year Carphone Warehouse announced it would close all of its 531 standalone stores and make 2,900 redundancies.

Ms Palmer said the decision was "controversial" but "necessary and inevitable if retailers are to have a more sustainable balance between their physical and digital offerings."

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said that in the long term "Dixons is betting that its service-centric model will help it fend off online competitors".