Warning of a cut-throat Christmas

Currys and PC World parent Dixons Retail yesterday forecast cut-throat Christmas trading as Europe's second biggest electronics retailer also reported slowing UK sales growth.

Dixons said same-floorspace sales in the UK and Ireland climbed 2 per cent in the first half of its financial year - a slide from the 6 per cent rise in the first quarter following a World Cup-related boost to TV sales.

It came as the group revealed it had narrowed losses in its first trading half to 10 million from 16m in the UK and Ireland. Group underlying pre-tax losses fell to just under 8m in the 24 weeks to 16 October, down from 17.6m in the same period of 2009.

John Browett, Dixons' chief executive, put faith in the group's store overhaul project to help it through what he believed would be "an extremely competitive" festive season.

Browett said the company also hoped Christmas demand for iPads, motion-sensitive gaming systems and 3D TVs would offset the impact on consumer sentiment of the government austerity measures. However, he added: "It is clear to us that new technology sales will be strong. However, the key question is how much of that substitutes for other expenditure in this kind of environment.

"We are not expecting an easy Christmas, we think it is going to be very competitive."

Dixons' technology products are backed by a new advertising campaign featuring Star Wars robots R2-D2 and C-3PO.

Meanwhile, Dixons said it had now refitted 250 stores, with 25 launched under the megastore format across the UK.