Currys looks to AI tech to drive growth as profits climb
The boss of the UK electrical chain Currys has said it stands to gain from the rise of artificial intelligence, with AI-enabled mobile phones and computers selling well, as the company battles to get back on track.
Samsung’s Galaxy S24 mobile phone, which uses AI tools to offer better photography and instant translation, is one of its bestsellers, alongside more traditional products such as large, 85-in-plus TV screens, boosted by the Euro 2024 football tournament, along with air fryers, action cameras and drones.
During the cost of living crisis, fewer consumers upgraded appliances, with demand for small electrical goods particularly affected.
On Thursday, Currys reported a 2% drop in UK like-for-like sales in the year to 27 April, while revenues in Scandinavia fell by 3%. Even so, underlying profits before tax climbed by 10% to £118m.
After three years of revenue declines, there were reasons to be more cheerful about the outlook for topline growth, said Alex Baldock, the Currys chief executive.
He said: “When we look at what we sell, the coming wave of AI-led technology offers arguably the most exciting tech cycle since the Apple iPad in 2010.”
AI tools “help consumers solve real problems”, he said, ranging from a long battery life of 22 hours and better camera skills to studio-quality sound for video conferencing.
Currys said it was the first retailer globally to launch Microsoft Copilot+PC, a computer with an AI companion. Other new AI products include video games, which promise a better game experience and an end to online cheats. Companies such as Nvidia are working on characters controlled fully by AI to enable real-life conversations.
Baldock said: “We’ve seen a depressed consumer environment in all our markets in recent years. That said, things are improving. Consumer confidence is turning up, and is nine points higher than it was a year ago. The big-ticket purchase index is also up.”
The retailer is also using AI to improve its customer service, for example for the after-sales chatbot, working with its partners Accenture and Microsoft. Currys has become Microsoft’s first official retail repair partner in the UK.
Guy Lawson-Johns, an equity analyst at Hargreaves Lansdown, said: “An increase in UK consumer confidence, driven by rising economic optimism, suggests that a recovery in discretionary spending may be under way.
“But while margins have improved, prolonged weakness in consumer demand will be on everyone’s mind. A continued improvement will need to be seen before management can say the recovery job is done.”
Currys shares fell by 6% in early trading on Thursday and later traded at about 4% lower, valuing the company at nearly £820m.
The company rejected several bids from the US investment group Elliott in February, the last of which valued it at £742m.
