It’s game on... despite slump
GAMES addicts are fuelling one of the few high spots on the retail landscape, according to the second biggest outlet in the UK, Middlesbrough-based CHIPS.
Its confidence was bolstered yesterday by positive results from The Game Group - Britain’s number one high street retailer - which reported a 27.4% hike in total sales to the end of November and a 11.9% increase in like-for-like sales, described by one analyst as “a really strong result, given the current economic environment”.
Don McCabe, joint MD of CHIPs, which owns 31 stores nationwide, said Game’s results were indicative of the sector.
“The level of growth over the year is certainly in that ballpark. We were 25% to 26% ahead for the first six months and for the last three we were 1.5% to 2% up.”
Game’s like-for-like sales slowed to 1.8% over the last 18 weeks.
But Mr McCabe was confident Christmas sales would weather the chill winds on the high street.
“We do 70% of our trade over the Christmas period and we get a lot of new customers in who are discovering games for the first time.
“People are nesting. They are spending more time at home, watching TV, playing games or reading. It allows retailers such as Game and ourselves not so much to buck the trend, but to ride the current climate.”
What insulated both CHIPS and Game from aggressive on-line and supermarket competition was its trade-in offer, he said.
“It all comes down to the cost of acquisition. Seventy percent of our sales are on trade-in. Supermarkets have been marmalising (bringing down) the price, but by offering the trade-in facility it allows the cost of a game to be much cheaper.”
Similarly, a typical game that sold for £35 on-line and £45 on the high street looked less attractive when the £20 trade-in had been costed in. Mr McCabe said trade-ins also “tapped in to the pysche” of many consumers.
He said Chips would be looking to build its estate further over the next few years. “Now is not the ideal time, but we are always on the look-out (for opportunities).”
Meanwhile, it has just launched a website that drove consumers back into store to recyle their games.
Yesterday, Game said its previous guidance on full-year trading was unchanged: “To date, our customers’ spending patterns have remained relatively resilient considering the challenges in the wider economy.”
Game has been one of the strongest performers on the high street after new products such as Nintendo’s Wii Fit helped to broaden the appeal of gaming.
The company has 701 stores in the UK and Ireland, including 253 sites added following the acquisition of rival Gamestation.
