Dixons Store Group International saw sales fall ten per cent in the 12 weeks ended 10 January because customers delayed buying TVs and computers until after Christmas, once the sales had begun.
Like for like sales were down 10 per cent overall - southern Europe performed worse with falls of 14 per cent - UK computing sales were down 13 per cent compared to 9 per cent drop in the same period of 2008.
John Browett, chief executive of DSGi, said: "We expect 2009 to be challenging across most of our markets and are actively planning and managing the business for negative like for likes.”
Margins were down 0.8 per cent partly due to selling more kit at discounted prices and selling a higher percentage of comparatively low margin TVs and laptops than normal.
The firm is looking to cut even more from annual costs - another £20m will be cut giving a total of £95m a year. The retailer has also cut stock levels by 16 per cent over the period.
DSGi has a £400m credit facility which is currently unused although it expects "some drawdown will occur in the final quarter".
Its programme of store refurbishment is progressing well and tarted up stores which were trading for Christmas did better than expected. The new stores are seeing sales of 15 per cent to 25 per cent better than the rest of the group.
The only positive for the group was its ecommerce business which grew 6 per cent - although that contrasts with 31 per cent growth last year.
DSGi trades as PC World, Currys, Currys.digital, PC City - in Spain, Italy and Sweden, and Electro World in eastern Europe, Greece and Turkey. Online brands are pixmania.co.uk and dixons.co.uk. ®