Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

When the going gets tough, Brits buy 4K TVs and fancy food mixers.

Dixons Carphone, one of the retailers most exposed to the fall-out from Britain's vote to leave the European Union, reported first-quarter sales that beat analyst expectations, and said it had seen "no detectable impact" from the referendum result on U.K. consumers.

Britons it seems, have shrugged off the uncertainty and done what they typically do when things get a bit rocky: go shopping.

Dixons Carphone's same-store sales in the U.K. and Ireland rose 4 percent in the three months to the end of July. The number of customers visiting its shops remained steady, overcoming the uncertain political and economic environment.

Britain Bound
Dixon Carphone's reliance on the U.K. consumer has benefited from Brits' propensity to spend
Source: Bloomberg

It’s a message that's likely to be repeated over the next few days. Reports next week from a host of British store chains, including Next and John Lewis, could also add to the tone of resilience.

It might be tempting to think that when it comes to shopping, Brexit was just a blip.

That would be a mistake.

As Gadfly's Chris Bryant has argued, the economic adjustment from the referendum result hasn't been averted, it's simply been deferred.

While lower interest rates may be helping demand for household products, a substantial inflation pickup and any large-scale job cuts are yet to materialize.

If they do, that could dent demand for big-ticket electrical items, such as a 2,000 pound TV or a new washing machine.

Dixons Carphone was hit particularly hard after the Brexit vote, with shares dropping as much as 43 percent the day after the vote. That looked too severe.

While Next has recovered its post-Brexit losses and Marks & Spencer is only slightly down, Dixons Carphone is about 9 percent below its pre-referendum level. That looks about right. 

Dixons Carphone Looks About Right
Price to earnings ratio lags other non-food retailers, reflecting its exposure to big-ticket electrical items.
Source: Bloomberg


There are a few things working in its favor. Although the company won't be immune from rising sourcing costs from the post-referendum slump in the pound, it says its significant buying power, together with the deflation that tends to be a feature of the electronics market, should help it keep prices in its stores competitive.

It also has substantial exposure to mobile phone sales, which is helpful since they're a bit less of a discretionary purchase than the latest juicer.

However, the chain's dependency on big-ticket items is a risk, as are the thin margins that are typical of electricals retailing. The shares are trading on a forward price earnings ratio of about 12 times. That's a bit below the broader U.K. non-food retail sector, which is about 13 times, according to analysts at UBS. 

The slight discount looks deserved. While Brits are still spending at the moment, it's not yet clear, if life gets tougher still, whether they'll shop harder or just go home.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Andrea Felsted in London at

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Jennifer Ryan at