DSG turns to service after profits drop

Though the electronic empire’s overall sales were up 14 per cent to £3.8 billion during the six months to November 11th, profits before tax landed at £78.9 million – compared to last years figures of £105.2 million. Consumer electronics, with flat screen TVs in particular, performed better than PCs with over all sales up five per cent compared to three per cent for computing products.

The results seem indicative of DSG feeling the pinch of small margins, and possibly in response to this the retail giant has increased its focus on service – announcing it will invest £50 million in the next five years in its TechGuys support programme. Six new dedicated ‘clinics’ will also be established in the second half of the year to bolster the existing three, which work in conjunction with operations running out of PC World stores across the country.

Over Christmas it launched what it called a ‘National Elf Service’, where 300 technicians were on call to deliver advice to UK consumers. The group claims that it received around 10, 000 calls a day, while the TechGuys website received a million hits over the period.

The retail giant seems to have taken a leaf out of the independent retailer’s book, many of which rely on revenue from repairs and technical help to prop up the low margins from hardware sales.