10/30/2008 10:54:00 AM
Carphone and Phones 4u warn of tough Christmas trading
Carphone Warehouse and Phones 4u both sent out rallying messages to staff this week, ahead of what is predicted to be one of the bleakest retail periods in recent years.
Carphone chairman Charles Dunstone sent an email to all of the company’s employees on Monday (27 October) with the message that trading conditions could become ‘very severe’.
On the same day, Phones 4u used its monthly commercial brief for store managers to underline value and price saving tactics. Phones 4u managing director Brendan Sweeney (above, right) said he expects the final three months of the year to be ‘very tough’.
A deal has been struck with Orange to allow Phones 4u to discount line rental straight from customers’ bills on certain packages, rather than through redemption. The discounted bills will kick in from November.
The retailer also told managers to stress to shoppers the opportunity to obtain a free gift, such as a laptop or Sony PSP, as a Christmas present when signing up on a contract. Phones 4u will also give big discounts for customers trading in their old handsets, with the promise of a £25-per-month deal on a Nokia N96 if they bring in an old N95.
Meanwhile, Dunstone emphasised the pressure on customers’ budgets and rising unemployment as a key factor with what is anticipated to be a marked decline in footfall.
In what appears to be a direct comparison to Phones 4u, he said that Carphone’s lack of debt, after the £1bn injection from Best Buy for 50% of the retail business, placed it at an advantage as far as securing a bigger share of the declining market.
Separately, the Confederation for British Industry (CBI) has recorded October as the seventh consecutive month for falling sales, and suggested a continued drop in the coming months.