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Electrical

AO welcomes ‘record’ Christmas quarter

The group is approaching the next financial year with ‘confidence’, citing that a structural shift to online has been ‘cemented’ in consumers' minds in 2020

AO World has welcomed its “strongest ever” peak trading period over the Black Friday and Christmas period, with year-on-year UK revenue soaring 67.2% to £457.3m in the quarter ended 31 December 2020.

It comes as the group said it has continued investment in its infrastructure in order to deliver higher levels of revenue, including additional staff in warehouses, vehicles and drivers. 

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The retailer said it was “delighted” with how these investments and corresponding planning for structural market changes have played out, adding that there does remain some “Covid created imbalances” in supply and demand, however.

According to the group, it has incurred “significantly” higher costs as it negotiates some of the operational challenges of working in a Covid compliant environment, particularly in the reverse supply chain. 

It has also seen a slightly increased rate of cancellation of individual consumers’ long term contracts in mobile and warranties, reportedly driven by the impact of the pandemic on customer behavior.

Nonetheless, it is approaching the next financial year with “confidence”, citing that a structural shift to online has been “cemented” in consumers’ minds in 2020.  

This is reportedly compounded by ongoing tailwinds it expects to be driven by working from home, as well as the associated usage of electrical products around the home. 

AO founder and CEO, John Roberts, said: “I believe we’ve seen ten years of change in ten months, and experienced our strongest ever peak trading period. We backed ourselves by investing early in warehouses, vehicles, stock and people. 

“This not only set us up to satisfy customer demand for electricals for the current crisis but also for the longer term, as the structural shift to online becomes a permanent feature of the market in the UK and Germany. One of our biggest achievements this period is to have our German business profitable throughout Q3.”

He added: “Our confidence in those investments has been rewarded by these exceptional levels of sales. We’ve seen how the short-term costs translate into a fantastic opportunity to drive lifetime value for millions more customers. 

“We’re delighted to have earned their trust after their first purchase and their first experience of the AO Way. We’ll continue to make the right decisions for our customers, partners, people and planet too.”  

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