Dixons trumpets strengths as Ao.com prepares to float

Dixons told analysts in a briefing note that it is the market leader on price, service and brand recognition in the white goods category and said it has grown faster online than Ao.com over the last three years in major domestic appliances (MDA).

The multichannel electricals specialist said that it is 5% to 10% cheaper than other multichannel competitors and around 3% cheaper than pure-play online rivals including Ao.com.

Dixons issued the presentation after Ao.com confirmed its intention to float, causing Dixons’ share price to fall on suggestions Ao.com may make market share gains.

In the presentation, Dixons issued a broadside regarding its competitor’s product review service. “Unlike Ao.com, Dixons Retail does not run competitions or voucher customers for favourable reviews,” it said.

Barclays analyst Christodoulos Chaviaras said: “With pricing and installation prices either identical to Ao.com or cheaper, we believe Dixons offers the most appealing customer proposition in the market.

“By having a multichannel model, unlike pureplay online competitors, Dixons is also able to utilize its UK store base to its advantage.”

He added: “Furthermore Dixons’ role as the last specialist electrical retailer in the market has meant that it is able to offer a comprehensive and convenient support service to its customers - something which is tougher for online players to offer, in our view.”

A flotation could value Ao.com at £1.2bn. The etailer generated sales last year of £198m, and says its website accounts for 19% of the online MDA market. Dixons said it has a 27.7% share of the overall MDA market and £900m annual sales in the category in the UK and Ireland.

Dixons said: “Our MDA share is growing faster than any other significant operator in the market.”

Ao.com hopes to expand its range and launch into Germany by March 2015 using the “firepower” gleaned from its IPO, according to chief executive John Roberts.