Verdict on electrical retail sector

A new report by retail research group Verdict says product innovation in the electricals sector, combined with market conditions likely to protect the UK market from foreign entrants, will enable electrical retailers to keep developing creative retail formats.

The report also predicts that over the next five years Dixons will topple Boots from the position of Britain’s dominant retailer.

Spending, in volume terms, on electrical products is forecast to grow by almost 45 per cent in the next five years. While prices will continue to fall in the sector, cutting into profits, the net rise in consumer spending is set to be more than 28 per cent over the period 2000-2004, says the report.

According to Verdict’s figures, over the last five years Dixons’ market share has grown by 56 per cent, and Comet by 40 per cent. Verdict predicts that Dixons’ market share will rise from 27 per cent to more than 30 per cent during the next period.

“Dixons has been very successful in developing new formats in response to new markets (PC World, The Link),” says the report.

Verdict suggests that the arrival of Wal-Mart to the UK health and beauty market is likely to be the biggest obstacle to further growth by Boots the Chemists.