Vodafone is set to spend around £150m on rolling out an estimated 250 new Vodafone stores across the UK in a bid to challenge the high street dominance of rival operator EE and indirect retailers Carphone Warehouse and Phones 4u.
Sources within Vodafone claimed around 250 stores would be rolled out under the two year programme, although Vodafone insisted no decision has been made. The operator currently operates around 380 stores. An additional 250 stores would bring it in line with EE’s portfolio of over 600 stores and see it overtake O2’s 467 stores.
It would also change its relationship with its independent retailers Carphone Warehouse and Phones 4u, which could see it ditch both in the future. The operator has made no secret of its desire to return to a much more direct relationship with its customers with group CEO Vittorio Colao recently stating that Vodafone is aiming ‘to bring the customer experience back into our hands’.
One source told Mobile: ‘In the short and medium term Vodafone wants to open more stores and in the longer term it will review its relationships with Carphone Warehouse and Phones 4u which have changed as the market has changed. Vodafone wants to get the stores built first, then they can play hardball with the indirects.’
The move is part of Vodafone’s £7bn Project Spring strategy which aims to boost network performance and customers’ retail experience over the next two years.
Under the programme Vodafone UK has been given £300m, of which £150m is devoted to network improvements, with the other half allotted to boosting the operator’s retail footprint and customer experience.
A Vodafone spokesman said: ‘We are working on plans to increase investment in our own-branded retail stores in the UK, using funds made available through Project Spring...[but] we currently have no plans to significantly alter the mix between indirect and direct retail distribution in the UK.’
Analysts said Vodafone’s move to increase its retail footprint was overdue. Phil Kendall, Strategy Analytics director, said: ‘Vodafone is weak in the consumer market and playing second fiddle to its rivals, so connecting with the consumer on the high street would benefit them.’
Author: Carol Millett