Electronics retail big Currys has warned of decreased client spending as inflation and rates of interest hit consumers – because it revealed a dip in gross sales and income.
“Looking ahead, we’re wary of optimism about consumer spending power,” its chief govt stated within the firm’s finish of yr outcomes.
Consumer sentiment has been excessive regardless of excessive value rises and rising borrowing prices because of rate of interest hikes.
A carefully watched index of customer sentiment stated client 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 economic system.
Despite this, and unemployment hovering close to a report low, the Currys boss, Alex Baldock, stated the chain is being “prudent” in its monetary planning and strengthening its stability 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 income 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 workers 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 general like-for-like gross sales fell 7% because of a fall in client spending, which Currys has attributed to persistent inflation and rising rates of interest.
At the identical time it stated spending on know-how had normalised after robust progress in the course of 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 prime finish of steering that had been issued after two revenue warnings.
No full-year dividend can be paid to shareholders on account of the unsure backdrop.
“We’ve had a very mixed year,” stated Mr Baldock.
Content Source: information.sky.com