Dixons warns of tech sales slump

Sales are down at PC World, just weeks after high street rival Time hit the buffers

Dixons Group has warned of disappointing sales at its PC World outlets, which sell computer hardware, software and services to small businesses and consumers.

This news is likely to add to concerns over the future of high street computer retailers as it comes only weeks after the collapse of Granville Technology Group, which ran Time, Tiny and The Computer Shop.

In its latest trading update, issued on Wednesday morning, Dixons Group said that like-for-like sales at PC World were down 7 percent in the 16 weeks to 20 August 2005, compared to the same period in 2004. Total sales — which included stores that weren't open last year — crept up one percent.

"Total sales in the computing and communications division continued to be influenced by price deflation in the hardware market, which outpaced the growth achieved in unit sales," said Dixons Group in a statement.

Sales at Dixons' high street stores, which sell a wide range of electrical goods including PCs, peripherals and software, were mixed, with total sales dropping 8 percent. Total sales at The Link stores, which sell mobile phones, plummeted 20 percent.

John Clare, Dixons Group's chief executive, blamed a slowdown in consumer spending for creating what it termed a "relatively challenging period".