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Zoe Mills, Senior Retail Analyst at GlobalData, a leading data and analytics company, offers her view on this news;
“AO World’s share price has fallen by over 18% in early morning trading after the online electricals specialist became the next retailer to warn of the ongoing supply chain issues impacting its sales. While its H1 FY2021/22 results were positive – group revenue was up c.5% against a strong comparative period that saw many consumers purchasing big ticket electrical items at the start of the pandemic – it is entering its second half in a much more precarious position with regards to its profits. Indeed, its profit forecast will rely on a successful H2, with group adjusted EBITDA forecast to range between £35m and £50m for this current financial year – down from the £64m it reported for FY2020/21.
“While other retail categories will be able to satisfy consumers with replacement products, the way that electricals shoppers decide on products makes this more difficult, with specific brands and models being demanded. Managing consumer expectations regarding delivery timelines will be essential to appeal in the run up to the festive period, particularly for those ordering items in time for Christmas.
“This announcement has had a rippling effect on the electricals sector, with Currys shares falling 8% as the prospect of higher costs associated with the shortage of delivery drivers and other supply chain constraints weigh on the sector.”