Dixons backs Apple punters to swallow big price hikes

Apple fans are prepared to swallow Brexit-fuelled price hikes of up to 25%, the boss of Dixons Carphone said today, as he celebrated growth in Christmas sales for the fifth year in a row.

Apple and rivals Microsoft and Dell said prices for some goods would rise this year due to the pound’s plunge in value following the EU referendum.

Seb James, chief executive of Dixons Carphone, said prices of Apple goods have already gone up, in some cases by up to 25%, but demand for products like the Macbook has held up.

“If you want a Macbook you often don’t want something else,” James explained. “Apple customers are not as price sensitive — as they tend to be at the affluent end of our customer base.”

James said it was too early to assess how all customers would respond to inflation, but so far there had been “a little bit of elasticity but not a huge amount and not nearly as much as prices have changed”.

The company is yet to see any Brexit effect, he added, as he revealed a 4% rise in group sales in the 10 weeks to January 7.

Largescreen TVs, which the firm views as a bellwether for consumer sentiment, showed a “solid performance”. In the UK, revenue from stores open for more than a year was 6% higher, though that was flattered by a transfer of sales from closed shops.

Sales of electricals rose 9% in Britain, though “patchy availability” of larger, higher-margin devices hit sales and margins in mobile phones. The group recorded its biggest-ever Black Friday and managed to keep margins flat, despite offering “ground-breaking” prices.

Dixons Carphone confirmed its full-year pre-tax profit would be in the region of £475 million to £495 million compared with last year’s £447 million. But shares fell 5% to 320p on the update.