On a windy weekday morning at a sprawling retail park west of Croydon, the car parks are only slowly starting to fill up. But one store is already grabbing shoppers’ attention – a whopping great hangar-style branch of the US electrical chain Best Buy, which opened its doors at the end of October. It is one of 200 such outlets planned for Britain.

You could hardly fail to notice the brash blue and yellow signs welcoming customers to “the world’s leading technology store“. The US discount electricals chain is slashing prices by up to 50% to draw customers from the stalwarts of the highly competitive British high street, and its new UK website has gone live.

Analysing this commercial threat in forensic detail is Hugh Harvey, managing director of Comet Group, one of the oldest electrical retailers in Britain and the first to head to out-of-town stores in the 1970s. Best Buy got its British rivals twitching when it announced publicly that it was prepared to incur losses of $55m (£34m) in its first year of trading in Britain in order to grab market share from rivals.

Harvey is under no illusions about what this means for his company, already struggling from competition on the internet and with established rivals like the revamped Dixons breathing down its neck.

Confusion

He says: “It is the largest electrical retailer in the world but it is principally a US retailer and it is trying to establish big box retailing here. I welcome the competition and anything that makes us better. It’s a tough gig. But if you bring across a US concept to the UK you are going to have to work hard because the incumbent retailers are good at what they do.”

Comet has had its share of problems. Confusion has been one of them. Five years ago the chain underwent a £20m rebranding to differentiate itself from other players in the market, particularly Currys, as both company logos used white letters on a red background and their names were easily confused.

But the new orange-and-white logo has not attracted universal approval, and the store has faced criticism that its new-style stores are too small and that the quality of service can still be hit and miss.

It is all a far cry from the firm’s humble beginnings. Comet was founded in the 1930s by entrepreneur George Hollingbery, who opened his first store in Hull, charging radio batteries but also selling and renting out electrical products. As Comet expanded under the stewardship of his son Michael, he came up with the wheeze of removing the goods from their boxes to display them — unheard of at the time.

In 1984, Comet became part of the Kingfisher Group but is now owned by Kesa Electricals, the third-largest electrical retailer in Europe. Turnover last year was £1.65bn and pre-tax profits £11.5m. Even after the World Cup boost, like-for-like sales have been falling, down 1.4% in the full year to the end of April.

Harvey strongly defends the group’s current approach – smaller stores with more emphasis on service – and points out that before his stewardship Comet had gone down what he calls the “big shed” route – and customers did not like it. “Until the late 1990s, stores were averaging 10,000 sq ft .

Then just before my time the business went big – went ‘copy America’, this time with very big out-of-town stores. The change that we’ve got to grips with over the last five years is that’s not what customers want because very big stores are not female-friendly and there is too much choice.”

The chain has 250 stores, including 50 two-storey units designed to maximise space while maintaining a more intimate “feel”. At the opening of the second, on his home territory in Speke in Liverpool, Harvey relates how “I got chatting to a lady and she said: ‘Your previous store felt like a shed, but this feels a bit like John Lewis’. That was deliberate as we’re not about having the biggest stores. We are about having the most appropriate-sized stores and the best shopping experience and service.

“Today the role of the internet is to provide the catalogue and the role of  the store is to provide the experience of the showroom – almost like a department store. We have made the transition from an out-of-town shed operator to an out-of-town store and our fit and finish is much different to how it was.”

But he adds: “Less than half – in fact about a third of customers – have done their research online. It is different from five years ago when people went in store and then bought online, but of course the price differential has massively reduced. So the vast majority of customers are buying from stores  because that is where they see the product.

In September Comet’s logo was freshened up and a new slogan – “come and play” – launched. Harvey says the new branding is trying to convey a fun and friendly approach to its customers, appealing to different target audiences to come into stores and try out some of the interactive displays, such as 3D TV.

That experience is important, Harvey adds, as the vast majority of major purchases are also family purchases. “We measure the footfall and during the busiest times at weekends it is family-based. The kids will disappear to the computing/digital camera area, the ladies graduate to kitchens – typically these days to toasters and kettles, as that’s how people can change the look of their kitchen. And the men are down in the TV section salivating over a 65in flat-screen TV.”

Business ticks over throughout the year, with spikes on public holidays, but with peak sales concentrated in the four or five weeks in the run-up to Christmas. Harvey’s own predictions for Comet’s best-sellers are Apple’s iPad, along with 3D TVs (its most expensive is a 65in Panasonic at £4,499.99) and cake mixers and food processors, where sales have been boosted by the BBC TV’s Great British Bake-off series.

Hughes says that the company’s objective is to help people to make the best of technology – in the broadest sense. ” A halogen hob is technology to some people. To others it is just a sexy-looking oven or hob.”

To underline this, Harvey points to his iPad and makes a distinction between “geeky” buyers and ordinary people who simply recognise how technology can change their lives.

Scary

“The business has historically been pushed by technology and there is a larger segment of people who are less interested in how the thing actually works and more interested in what it can do to improve their lives. That is why Apple is so successful because their products are not scary but are high technology.”

Harvey has just heard that Marks & Spencer is ditching its short-lived move into selling household gadgets such as TVs and iPods, as part of new boss Marc Bolland’s drive to consolidate its core business and the strength of its own-brand products.

He does not seem surprised by the announcement: “Electricals are a highly specialist area of retailing. It is a tough market. Its margins are tight and basically they can make more money from selling pots and pans – and I should know as I did it at Woolworths.

It is a sector which demands a high degree of specialism. Virtually everything you use has to be used in conjunction with something else. In the old days it was a bunch of wires, but now it is extraordinary that it is virtually wireless.”