Britain's largest electrical retailer, Dixons, painted a bleak outlook for the retail market as same-store sales fell in the second half, but shares pushed higher on relief the news was not worse.
Compounding an increasingly gloomy mood in British retailing, chief executive John Clare said he was cautious about the prospects for his group's main market over the coming year. "Most people are now feeling fairly gloomy about market prospects. Do we share in that? Yes we do. It's difficult to see how and when it's going to get better," Mr Clare told reporters on a conference call.
"Some of the talk of things in pipeline could slow consumer spending down further," he said, alluding to the risk of further interest rises and a slowing economy on Dixons's main UK market.
Dixons, which trades as PC World, The Link and Currys in the UK and as PC City, UniEuro and Elkjop in continental Europe, said total group sales rose 7 per cent in the second half, but the like-for-like figure was a fall of 1 per cent.
The group, which operates through over 1,400 outlets in 13 countries, also recently signed an option to buy fast-growing Russian and Ukrainian retailer Eldorado Group by 2011 for a fixed sum of $1.9 billion.
Dixons said it had ended an agreement with furniture retailer MFI to sell Hygena kitchens through its Currys chain, and would concentrate on selling more profitable appliances instead.
MFI said it would take a £5 million pound exit cost and a 3 million pound hit to operating profits. Dixons also said it planned to continue a share buyback programme, which has seen 3 per cent of the shares in issue bought back this year with a value of £92 million.