AO World launches review into underperforming German business

·1 min read

UK electrical goods retailer AO World is launching a review in to its German business after bosses revealed the division took a heavy hit in sales.

The company suffered a 24% fall in sales in the country in the three months to the end of 2021.

Business in the UK also took a hit, with a drop in sales of 12% when compared with a year earlier, although on a two-year basis sales were up 47%.

AO said: “Our German business is being significantly impacted by a number of recent material changes to the local trading environment: competition in the online market has intensified whilst online penetration has returned to pre-pandemic levels; digital marketing costs have substantially increased against pre-pandemic levels; and supply remains constrained.

“We expect these trends will continue for the foreseeable future in the German market.”

Options are expected to include a sale of the business.

The latest plans come just two months after bosses said they had seen product shortages, price hikes, and customers reigning in spending in the run up to Christmas.

Prices have gone up by 10% to 12%, with bosses warning of further rises due to inflation and supply chain costs increasing.

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