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AO sales rise fast as online demand grows

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AO says changing customer behaviour and growing online demand have helped to lift its first-half sales by an expected 57%.

AO today said it expects first-half revenue to reach £715m in the six months to September 30, as sales in AO’s core UK market rise by an estimated 54% and those in Germany by 83%.

The electricals retailer, a Top50 retailer in RXUK Top500 research, said sales had continued to rise steadily from the first quarter – under lockdown – into its second quarter – as competitors’ stores started to reopen. “We believe we have seen a lasting step change in online penetration,” it said in today’s trading statement.

It said that its German business, which saw particularly strong growth, had also benefited from strong demand for online shopping in that market. Now, AO expects that the business will move into profit – before tax, interest and one-off costs – during peak trading and into its next financial year.

The business responded quickly during Covid-19 lockdowns, with staff moving to work from home wherever possible. The higher costs of Covid operations have, said AO, been offset by extra income from delivery services and as less competition lowered marketing costs.

John Roberts, founder and chief executive of AO World, said: “The last six months of trading have been like no other during my two decades in the business. AO was in good shape coming into this financial year and the global, structural shift in customer behaviour to online, accelerated by Covid, emphasised our strengths.

“The progress that we’ve made in Germany gives us the platform and confidence to grow. We remain excited by the opportunities ahead and ambitious to realise them. 

He added: “While we remain mindful of the uncertain economic climate caused by the pandemic and Brexit, we are on track with plans and well set for our biggest ever peak trading period in the UK and Germany.”

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