UK's Currys targets more automation and offshoring to mitigate cost hikes

By James Davey

LONDON (Reuters) - British electricals retailer Currys will speed up automation and move more business processes to cheaper locations abroad to reduce the impact of rising costs, its boss said on Wednesday.

Currys, which sells products such as laptop computers, mobile phones, TVs, washing machines and tumble driers, is facing 32 million pounds ($39 million) of additional annual costs from April due to measures introduced in the new Labour government's first budget in October, including hikes in employer social security contributions and the minimum wage.

Chief executive Alex Baldock said that, in addition to some price rises, the search for cost efficiencies would mean more automation and further offshoring.

As an example of automation, he said Currys was replacing paper price tickets in stores with electronic shelf-edged labelling. That would be rolled out to about 100 UK stores this year.

“You can expect initiatives like that to accelerate,” Baldock told reporters, highlighting Currys' logistics operation and supply chain as other areas ripe for more automation.

“As people costs are inflated by government policy, that’s what we have to do - we have to make ourselves more cost-efficient," he said after Currys updated on Christmas trading.

On offshoring, Baldock noted that Currys already has nearly 1,000 workers in India carrying out administrative and IT functions.

"You can expect to see more of that, that’s just inevitable," he said.

All of Britain's big retailers are stepping up their drive for cost savings.

Baldock said Currys would strive to keep price rises to a minimum.

“One of the benefits of being No. 1 in our market is that we can exert the most heft with our suppliers to keep prices down,” he added.

($1 = 0.8185 pounds)

(Reporting by James Davey; Editing by Mark Potter)