Electronics retail large Currys has warned of decreased shopper spending as inflation and rates of interest hit buyers – because it revealed a dip in gross sales and earnings.
“Looking ahead, we’re wary of optimism about consumer spending power,” its chief government stated within the firm’s finish of yr outcomes.
Consumer sentiment has been excessive regardless of excessive worth rises and growing borrowing prices on account of rate of interest hikes.
A carefully watched index of customer sentiment stated shopper confidence in June was at its strongest in 17 months and grew for the fifth month in a row.
Latest retail gross sales figures additionally confirmed progress when contraction was anticipated, illustrating the resilience of the UK financial system.
Despite this, and unemployment hovering close to a file low, the Currys boss, Alex Baldock, stated the chain is being “prudent” in its monetary planning and strengthening its steadiness sheet.
“We may be cautious in our promises for the short-term, but our confidence is undimmed as we build a stronger and more resilient business that is fit to prosper in the longer term,” he stated.
The UK and Ireland arm of the enterprise carried out properly with earnings earlier than curiosity and tax of £170m, up 45% on final yr. Cost financial savings within the enterprise elevated margins and offset falling gross sales, the outcomes stated.
Operating prices fell and people financial savings additionally “more than offset inflationary cost pressures and increased business rates tax”.
UK and Ireland employees had been praised for his or her work. Mr Baldock stated their “great work shone through in world class engagement scores; in another year of record customer satisfaction; in maintaining number one market share”.
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But throughout the corporate total like-for-like gross sales fell 7% on account of a fall in shopper spending, which Currys has attributed to persistent inflation and rising rates of interest.
At the identical time it stated spending on expertise had normalised after sturdy progress through the pandemic.
“Our market has been tough everywhere, with depressed demand, high inflation and unforgiving competition,” Mr Baldock stated.
Performance within the Nordics, the place about 40% of Currys income is generated, is behind the drop in pre-tax revenue, down from £186m final yr to £119m this yr. The revenue is on the high finish of steerage that had been issued after two revenue warnings.
No full-year dividend shall be paid to shareholders because of the unsure backdrop.
“We’ve had a very mixed year,” stated Mr Baldock.
Source: information.sky.com”