The largest electrical retailer in the United Kingdom has announced that it will be cutting annual running costs by £50m over the next three years, rather than the two years previously planned. This comes after news that sales fell by 11 percent in the last 11 weeks, and three percent in the year ending 26th March 2011. Dixons, also trading as Currys and PC World, estimates profit for the year ending 30th April 2011 to be approximately £85m. Falling consumer confidence and a Christmas period hit by bad weather is thought to be responsible for the drop in profit.
According to the Confederation of British Industry, 40 percent of retailers have experienced a drop in sales during March this year. Many expect this trend to continue for much of 2011, following the announcement of spending cuts and huge job losses. After the announcement by Dixons, share prices for the company fell by 17 percent. The Co-Operative Group have also expressed concern, even though their sales increased in 2010. According to the Office of National Statistics, prices will rise even further as a result of the budget, pushing inflation up by an added 0.29 percent.
Although 2011 looks set to be a difficult and turbulent year, small to medium sized businesses can plan for the future of your business, both long and short term, by seeking the professional advice of a small business accountancy. Records that are up to date and organised will allow a low cost accountants to prepare a financial statement and look at ways to cut costs without cutting customer service, or consumer confidence.
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