Dixons Carphone is raising pay for workers as the technology retailer’s boss warned of a “heating-up” in the market for staff.
Amid concerns about shortages of workers across the UK, the retailer has committed to increasing minimum hourly wages for its UK workers in shops, call centres and home delivery by an average of 9% from October, bringing them in line with recommended living wage levels of £10.85 an hour in London and £9.50 outside the capital.
The group also paid three one-off monthly bonuses of £150 each to delivery drivers, warehouse workers and those working on product repair and installation last year in recognition of their work away from home during the pandemic.
Alex Baldock, the chief executive, said the group had been able to hang on to and recruit sufficient retail workers, drivers for home delivery vans and product installers because it was also offering training and more interesting work as well as improving pay.
He admitted that a lack of HGV drivers was “a challenge” for the business, but that it had been able to use its muscle as a market-leading retailer to secure enough supplies of products. Dixons does not employ lorry drivers directly; they work for its logistics partner, DHL.
Baldock’s comments came as Dixons Carphone’s annual profits rose by a third as it notched up almost £5bn in online sales of electrical goods including televisions, laptops and video game consoles to consumers stuck at home during the pandemic lockdowns.
The retailer, which owns the Currys PC World brand, said revenues from electrical goods ordered online more than doubled year on year to £4.7bn underpinning a 34% rise in underlying pretax profits to £156m.
Baldock said he expected spending on technology to continue strongly as the shift to working from home and new interest in gaming and digital entertainment prompted a permanent change in habits. “We are really just warming up,” he said.
“Technology has become even more central to people’s lives. As the market leader, with the winning omni-channel business model, we can make the most of that.”
Online sales accounted for just over 45% of the company’s total annual revenues, which rose 2% to £10.3bn. Like-for-like sales of electrical goods were up 14% despite stores in the UK, Ireland, Norway, Denmark and Greece being shut for substantial periods.
The company’s adjusted pre-tax profits rose by 34% year on year to £156m, slightly ahead of analyst expectations.
Dixons Carphone said sales of computing products, especially Apple devices and gaming equipment, rose by a quarter while TV sales were “up significantly” helped by the Euros football competition and raised interest in digital entertainment including gaming. Sales of domestic appliances were slower while shops were closed but the company said they had been encouraging since reopening.
In the UK and Ireland – where the company will be rebranding as Currys this year and ditching the Dixons, Carphone Warehouse and PC World brands – online sales rose by 114% to £3.4bn.
This helped to offset lost sales from enforced store closures during lockdowns, which also kept its Dixons Travel airport outlets shut.
The company announced in April it would permanently close all Dixons Travel shops because it did not expect a sufficient recovery in passenger numbers to make up for the UK government’s decision to scrap tax-free shopping.
Baldock said Dixons would continue to drive online sales by updating its website, expanding its live-streamed online selling service, and testing out faster forms of delivery, including a tie-up with the ride-hailing and courier group Uber. He said Uber would offer a quick delivery service directly from stores rather than from out-of-town warehouses.
Restarting its shareholder dividend, Dixons Carphone said it had given back £73m in furlough payments received for its UK and Irish employees, as well as £144m in deferred VAT.