Electricals group Dixons Retail plc has issued a second profit warning after a poor trading performance hit by deteriorating consumer confidence.
The group, which owns Currys and PC World in the UK and also has operations in the Nordics, Italy, Spain and Greece, expects underlying profit before tax to be around £85m for the year to April 30, 2011.

This comes after the company forecast full-year profits of between £100m and £110m in January.

Sales in the UK and Ireland plummeted 11% like-for-like in the 11 weeks to March 26, 2011, with consumer confidence "even weaker than expected", according to a trading statement issued yesterday.

The business has focused on cash gross profits, managing to hold gross margins flat year-on-year, and management now expects that operating profit in the UK and Ireland for the year to April 30 will be approximately £70m.

The group has set out a four-step plan to cut costs and put the business back on track. This includes the potential sale of its Spanish business with 34 stores, a focus on cash generation and a reduction in capital expenditure.

Group chief executive John Browett said: "Consumer confidence across some of our markets is fragile and we expect it to continue to be so through much of 2011... Our Renewal & Transformation plan is working, customers are experiencing better store environments, improved ranges and increased levels of service. Notwithstanding the current tough conditions, we continue to make the business better for customers, easier for our colleagues and cheaper to operate and are confidant that the group can deliver an EBIT return of 3-4% over the medium term."

The 'Renewal & Transformation' plan has seen underperforming businesses sold off and a refurbishment of stores retained. The company believes it is still growing market share and plans to transform a further 55-60 stores, including 15-20 Megastores in the UK.

Meanwhile, US electrics group Best Buy has announced the opening of two new stores in Bristol and Hayes next month, as it continues its rollout across the UK.