Dixons Carphone continues to ride the electricals boom, and airlines face CMA probe over refunds

“The FTSE 100 was up more than 1% in early trading after gains in Asia and the US overnight amid hopes a US fiscal stimulus package could be launched now senior Republicans have acknowledged Joe Biden as President,” says AJ Bell Investment Director Russ Mould.

“Investors also seem to think a Brexit deal is in the offing, with news of an extended House of Commons sitting (presumably to pass any prospective deal) speaking louder than Boris Johnson’s apparent caution in public statements over the prospects for an agreement.

“Tangible progress on either of these fronts could help put the markets on the front foot in the final trading days of 2020.

“Gold prices remain above $1,850, suggesting some people are still hedging their bets by putting money into the safe haven.”

Dixons Carphone

“Dixons’ sales of electricals have been so strong that for once it doesn’t really matter that its mobile phone business continues to be horrific. The massive growth in electricals diverts the attention away from the weak part of the group and lets management talk about the positives for Dixons rather than the negatives.

“Perhaps the most important point from the latest results is the comment on recent trading where electrical sales have continued to grow at a strong pace. There was a fear that its success earlier this year was simply down to a one-off gain, namely people buying laptops so they could work from home and perhaps replacing a TV or a washing machine that’s been worked harder during lockdown.

“Ongoing sales moment could suggest people have been happy with the service they’ve experienced and they’re back for more, or it could be that the prolonged period of being at home has focused more attention on upgrading appliances.

“Dixons still faces a tough 2021 as there will be large comparative figures to beat and any return to normality could see consumers focus less on their home needs. There is also the question of how Brexit might lead to supply disruptions. Those issues are going to apply to a wide range of retailers who may be sitting pretty now, but will have to work even harder next year.”

Airlines - CMA Investigation

“If the aviation sector was flying on one engine thanks to the outsized impact it has suffered in the coronavirus crisis – well now that engine is on fire as regulators probe whether airlines broke the law on being difficult with covid-19 cash refunds.

“While the Competition and Markets Authority expresses some sympathy for the industry’s predicament, quite rightly it is not letting that get in the way of upholding the rights of consumers.

“Mounting reports that some passengers didn’t get cash refunds despite travel bans preventing them from taking flights left the CMA little choice but to act.

“Given airlines have a reputation for levying all sorts of extra costs on passengers in the good times it only seems right that they hold up their end of the bargain.

“After all if you turned up with baggage over the allotted allowance, it’s unlikely an airline would accept payment in kind, an offer to pay months down the line or a promise to bring less luggage next time to make up for it.

“The danger for airlines and other travel operators is that regulatory action hits just as they look towards a potential recovery in demand in 2021, crimping their wings as they look to regain altitude.”

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