Currys has announced it is to bring in more automation and that it is entering a period of “depressed hiring” after changes to employers’ national insurance, though it said the consumer environment “perked up” over the festive period with shoppers snapping up coffee machines and AI-enabled laptops.
The electrical goods retailer said it would pay dividends to shareholders for the first time in two years after underlying sales rose 2% in the UK and Ireland and 1% in its Nordic stores. Both arms have not grown at the same time since 2021.
Shares in the company soared more than 9% to almost 90p on Wednesday as Alex Baldock, the Currys chief executive, said the company had performed well in a tough technology market and expected to achieve profits of up to £155m in the year to the end of April – £5m to £15m more than previously forecast.
“Our market was slightly down in the year to date but it perked up a bit during the peak [Christmas period],” he said. “There are several things depressing sentiment – inflation, interest rates and general confidence – but there are some signs we are past the trough of consumer confidence and spending, with inflation having peaked and interest rates going to come down.”
He said shoppers had been prepared to pay a premium for AI-enabled laptops – such as Google’s Chromebook Plus or those loaded with Microsoft’s Copilot – and AI-enabled mobile phones and had also snapped up coffee machines, drones and beauty technology over Christmas. In contrast, TV sales were down.
Baldock said Currys faced £30m in extra costs from changes to the national insurance regime introduced in October’s budget but that the company had already established how to offset half of that.
He said “some price rises are inevitable” but Currys did not plan to lead the way and instead hoped to find ways to “mitigate as much as we can”. He said the national insurance change “depresses hiring and boosts automation and offshoring”.
The company is to implement more automation, including installing electronic price labelling at 100 stores this year so shelf-edge information can be changed with the press of a button, and more equipment in warehouses to improve efficiency. It already employs 1,000 people in India and may look to expand there.
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Baldock said Currys did not have plans to cut jobs but there would be a period of “depressed hiring” as the company tried to limit the impact of higher labour costs. He urged the government to phase in the national insurance changes more slowly than the current April deadline and said it should carefully consider new employment rules such as guaranteed hours for workers and changes to business rates that could raise costs for large retailers.
John Moore, a senior investment manager at RBC Brewin Dolphin, said: “It’s been a tough seven days for UK retailers, but Currys is managing to buck the trend, buoyed by AI products and a more general increase in tech spending. The company is a classic slow-build, self-help story, with sales on the rise, growing market share, and profits heading in the right direction.”
