Carphone Warehouse 2016 Annual Report Download - page 20

Dixons Carphone plc Annual Report and Accounts 2015/16
Strategic Report
Our resources
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We continue to refine our own-brand ranges to suit all budgets
and tastes. Our most notable successes have been the launch
of our own Sandstrøm cables brand alongside our Essentials
ranges as key entry level products in our ‘good, better, best’
line-up. These products are sourced by the Group’s teams
based in the UK, Nordics and Hong Kong in collaboration with
manufacturers in, for example, Asia.
Distribution and logistics
The Group sees distribution as one of the keys to success
in maintaining highly competitive margins and delivering
outstanding, market-beating service to customers. We operate
a centralised system of distribution centres for each of the
regions in which we operate. This delivers significant
competitive advantages, including reduced operating costs,
reduced supplier delivery costs, reduced stock volumes in
store, increased flexibility as to where to deliver and when,
and a more efficient home delivery network for both us and
our customers. During the year we consolidated our
distribution and repair centres with the integration of the former
mobile phone facility at Wednesbury into our Newark site.
While continuing to reduce costs, we are also constantly
raising the bar, both in terms of successful delivery and
installation rates, but also the range and quality of services
we offer customers nationwide. In our Nordic operations
(Jönköping, Sweden) and the UK (Newark), we operate two
of the largest distribution centres of their kind in Europe. The
Jönköping site is also expanding to incorporate an up-to-date
automated ‘small box’ operation. In the UK alone we now
make 50,000 deliveries per week, including some 500,000
installations per year.
Store portfolio
We operate a wide variety of stores to suit the local customer
demographics. We operate many high street locations, small,
very popular outlets in airport locations, and ‘megastores’ up
to 60,000 sq ft, in out-of-town locations.
We constantly review our store portfolio to ensure we have
the right store for customers in the most competitive locations.
As part of this ongoing review and following the roll-out of
Carphone Warehouse SWAS, in the UK & Ireland we are
implementing our 3-in-1 stores across the ‘big box’ property
portfolio and when complete we will have over 300
CurrysPCWorld Carphone Warehouse 3-in-1 stores.
These stores allow us to offer the best of both worlds to
customers, attracting new footfall and often at a lower cost.
In the Nordic region as well as Greece and Spain we also
operate a number of franchise stores. This arrangement allows
our brands to be present in a wider range of catchments, while
increasing the volume of purchases and therefore buying
power of the Group and reducing our capital requirements.
Intellectual property
Within our Connected World Services division we have
developed our pioneering multi-channel assisted sales tool
Pin Point powered by honeyBee. We are also utilising our
intellectual property to assist third parties, such as Samsung
and now Sprint, in connected retailing.
In the UK & Ireland we operate through Carphone Warehouse,
Currys and PC World brands, in the Nordics through our
various Elkjøp group brands, in Greece through Kotsovolos,
and in Spain through Phone House. These brands are
extremely well established and respected in their markets. The
Group also has two strong service businesses, Knowhow and
Geek Squad, aiming to delight customers from end to end
while generating significant new business opportunities.
As well as our retail and service brands outlined above, we also
sell a range of own brand products such as Sandstrøm, Goji,
Logik, Essentials, Advent and Epoq. Each of these brands
have specific target markets defined in conjunction with our
customer research findings.
Energy
Saving energy is good for the business, good for customers
and of course good for the environment. See our Corporate
Responsibility Report on pages 33 to 35 for details of the
Group’s environmental matters.
Cash and capital
It remains the Group’s policy to maintain a strong capital base
so as to maintain investor, creditor and market confidence and
to sustain the future development of the business. Through
careful cash management and with a focus on cost reduction
as well as efficient use of capital, management is focused
on ensuring we deliver a sustainable business with strong
cash generation.
As a Group we need to make the right choices as to how each
division utilises or preserves cash, whether it is in determining
ranges and stock held in store, growing mobile share with
accompanying working capital utilisation or managing returns
and related processes.
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