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E-commerce market matures as Dixons reports sales drop

26 November 2010 - 12:10 by Simon Crisp

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The news that Dixons Retail PLC has seen a fall in online sales despite the fact that its business as a whole is holding up well, is being taken as an indication that the e-commerce market is maturing and reaching a plateau in Europe.

Dixons CEO, John Browett, explained that the growth in the sales of electronics is coming to a halt across the continent, although he pointed out that his firm was still competing strongly with its other rivals in the world of safe shopping online.

Mr Browett believes that consumer habits mean that various retailers are attempting to conquer the multichannel approach, where a business is neither solely restricted to high street outlets or only operating as an e-commerce firm.

Mr Browett pointed to the fact that the number of people choosing to reserve online and then collect their products in-store has grown by 53 per cent, as being a key indicator of the way in which UK consumers are approaching e-commerce in the modern world.

In 2009 Dixons recorded total sales via its various channels which offer safe shopping online reaching £324 million, but in 2010 this total is likely to be down by around £14 million.

Significantly, the sales made by websites for brands like Currys and PC World, which are both part of the Dixons group, are not included in this total because they are thought of as part of a multichannel approach. Once every outlet is added together e-commerce sales actually rose by two per cent year on year.

Overall the outlook for Dixons and the various retailers it operates is looking healthier than many had anticipated, with losses reduced significantly and the total sales hitting £3.35 billion as the electronics market begins to grow after the slump.