DSGi, the company behind Currys, Dixons and PC World, will cut investment in its stores by about £30 million.
The move comes as the group reveals a 7% decline in sales over the first half of its financial year.
DSGi says that consumer confidence has "significantly deteriorated" in recent weeks, meaning that we are in a "depressed market".
DSGi says: "As a result we are further focusing on cash, cutting costs, improving margins and reducing stock. The group is also cutting capital expenditure by approximately £30m this year with reductions focused on lower returning areas of lesser priority".
DSG is reporting a decline in sales across all of its European stores up to 18 October, and does not expect a recovery before 2010.