Marcus Leroux, Retail Correspondent
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Best Buy took a step closer to its much-heralded arrival in Britain yesterday as it began a recruitment drive to attract up to 8,000 “blue shirts”.
The American electricals giant has been plotting its invasion since last May, when it announced a joint venture with Carphone Warehouse promising to revolutionise a tired consumer electricals market.
But Best Buy has found the going harder than expected, as it first postponed and then scaled back its plans. It will open its first stores, in Southampton and in Thurrock, Essex, next spring — several months later than the group had intended.
The threat of Best Buy’s arrival prompted DSG International, owner of Currys and PC World, to refurbish its branches and invest in a new generation of megastores, while also trying to allay criticism that it had dismal levels of customer service by unveiling a universal staff-training programme.
Retail experts say that Best Buy, through its employees with their uniform blue shirts, excels at customer service . It is a vital issue for electricals retailers, since the internet armed customers with up-to-the-minute price comparisons that have drained profit margins from the sector.
Paul Antoniadis, chief executive of branded operations at Best Buy, said: “We are really pleased to begin the recruitment drive for our first stores and are looking forward to meeting the talented individuals we hope will apply for the thousands of opportunities we plan to create across the UK.
“We’re very proud of our Blue Shirt training programme — a fun nine-week course which encourages the development of really enthusiastic and customer-focused employees.”
Best Buy’s target of creating 8,000 jobs is more modest than previous figures. As recently as April, the company was hoping to create 10,000 positions in the next four years. At the time, it was expecting to establish up to 70 stores in Britain, but yesterday it would not be drawn on the revised target.
This year, Roger Taylor, finance director of Carphone and chief executive of the joint venture, admitted for the first time that it would not be opening the first stores in 2009. He said that by launching later, it could obtain better sites.
John Browett, chief executive of DSG, has aimed barbed comments at Charles Dunstone, Carphone’s chief executive, over the joint venture. Asked about Best Buy’s arrival in March, Mr Browett said: “I think they will be pushed to have two stores by the end of 2010. Go and ask Charles Dunstone when he’s going to open all this stuff.”
In contrast to Best Buy’s optimistism over bringing “enthusiastic” American customer service to Britain, Mr Browett has argued that “inconsistent” service is not confined to DSG but is a British ailment. In May, DSG raised £323 million from investors to accelerate the refurbishment of its outlets. It has updated more than 100 stores and will have opened five new huge megastores by Christmas.
DSG is set to challenge Best Buy head-on. It has plans to establish megastores in the same business parks in Thurrock and Southampton where its American rival plans to open its first outlets.
DSG and Kesa, the owner of Comet, have made heavy losses this year as consumers cut back on big-ticket purchases. Best Buy has remained profitable, aided by the collapse of Circuit City, its biggest American rival.
Sam Hart, retail analyst at Charles Stanley, the broker, said: “Best Buy will be a big threat to the likes of DSG and Kesa, but its expansion is going to be slow. DSG is doing the right things, but there are huge structural issues in that sector in the long run, because it’s being commoditised. Price transparency is so clear with the internet.”
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