DSG INTERNATIONAL, the electricals retailer behind Dixons and Currys, is fighting back against competition from the internet with the trial of a no-frills out-of-town store.
Dixons Warehouse, which was launched in Dudley, near Birmingham, before Christmas, offers a significantly smaller range of products — about a third of those found in a high street Dixons or Currys — but at prices up to 8 per cent cheaper than can be found on the high street.
DSG, which is struggling to find new areas of growth in the highly competitive UK market, has been experimenting with several new store formats since it closed just over 100 Dixons high street stores in 2004.
Last year, the company tested a large edge-of-town versions of the Dixons format and this year it is set to open up to ten trial Press F1 stores, a new chain which offers a computer fixing and advice service.
John Clare, chief executive of DSG, told Retail Week, the trade magazine, that it was “very early days” for the Warehouse concept.
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He said: “It’s potentially a new way forward for us and we plan to open a few more but it is a test at this stage.
“We will be careful about what we sell and part of the test would be to measure what happens to Currys and what happens to Dixons.”
The Dixons high street chain performed well over Christmas but a spokesman said: “We don’t believe small high street sites are the long-term future of the Dixons brand. The stores are performing well currently but our focus is on large-scale electrical and computing superstores.”
Dixons Warehouse has its own internet site where customers can order goods for collection later.
It promises “everyday low prices that rival anything you’ll see on the internet”.
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The retailer pledges to beat any store within 20 miles on price, as well as Amazon UK, Argos, Comet, Currys, Sainsbury’s and Tesco. It backs up the pledge with a promise to pay back 150 per cent of the price difference up to three days after the product is purchased.
The outlet is styled like a DIY warehouse with simple racking and minimal staff.
Products range from large household electricals such as fridges and washing machines to laptop computers and MP3 players.
Dixons’ new formats director, Neil Lobo, is overseeing the progress of the Warehouse trial and is seeking to open several more stores in the next year.