“A quiet Christmas could spell trouble” for Currys, according to Hargreaves Lansdown.
Traditionally, the festive period is usually the busiest time of the year for tech and electronic retailers, with the latest gadgets perfect gifts for under the tree.
However, these items are often expensive, and a further tightening of purse strings could result in them being the first products to face the axe.
To compound matters further, Matt Britzman, an equity analyst at Hargreaves Lansdown, believes the short product cycle nature of tech products is also a problem.
“If-cash strapped consumers decide not to upgrade their model this Christmas, Currys will be left with a surplus,” which will result in heavy discounting, applying pressure to margins.
However, one positive is the group’s omnichannel offering.
Customers can enter in-store and have access to the entire online collection or speak to an in-store expert from their own homes.
“These services help attract and retain customers once they’ve made contact, and that’s helping the group to retain its market share,” said Britzman.
Britzman added that the Currys’ valuation is some way off its long-term average, reflecting short-term difficulties.
“While this could mark a good entry point for investors willing to accept the immediate risks, keep in mind that things could still get worse before they get better.”