The no-frills, pile-it-high Ikea-style store opened without fanfare at the Town Gate Retail Park in Dudley in a former Office World site two weeks before Christmas. It offers 'everyday low prices that rival anything you'll see on the internet'.
The shop, which sells both white and brown goods, appears to be both a solution to the high rents faced by the 214 Dixons high street stores and price pressure created by internet rivals.
DSG chief executive John Clare said it was 'very early days' and there were no plans to close any Dixons stores at present. However, he added: 'We have an issue with Dixons. It's no secret that small [general electricals] stores on the high street are not working any more. It's potentially a new way forward for us and we plan to open a few more, but it is a test at this stage.
'We will be careful about what we sell and part of the test would be to measure what happens to Currys and Dixons.'
Clare said the options for the fledgling format remained open and it could sell specific categories or ranges to avoid conflict with other businesses. The outlet has warehouse racking, skylights to reduce electricity costs and high security to minimise theft.
Products range from fridge freezers and laptops to washing machines and MP3 players, in a back-to-basics self-service environment that offers products up to 40 per cent cheaper than rival stores - including Dixons' own high street outlets. A limited offer of the bestselling products enables the retailer to keep prices down. Dixons boasts that there are no sales staff, just 'people to help with heavy boxes, and cashiers'.
The format is accompanied by an order and collect in-store web site operation at www.dixonswarehouse.com. If customers find a cheaper price locally, Dixons Warehouse pledges to beat any store within 20 miles - as well as the six best-known web sites, which it lists as Amazon UK, Argos, Comet, Currys, Sainsbury's and Tesco - by paying back 150 per cent of the difference up to three days after the product is purchased. Dixons new formats director Neil Lobo is overseeing the trial and will open two further stores in the Midlands in the next few weeks.
In 2004, the electricals retailer announced it would close 106 of its underperforming Dixons stores after they were squeezed by high rents and price deflation in the consumer electronics market.
DSG International reported a fall in pre-tax profits to£106.1 million for the six months to November 12, from£133.5 million the year before. Sales for the period increased 3 per cent to£3.5 billion.
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