Currys profits to grow despite cost-of-living crisis as it focuses on price to retain appeal, says GlobalData – Retail Times


Following today’s release of Currys’ figures for FY2021/22; Zoe Mills, senior retail analyst at GlobalData, a leading data and analytics company, offers her view: “Given the number of challenges faced this financial year, including supply chain constraints and the ongoing cost-of-living crisis, Currys’ FY2021/22 results are nothing to be scoffed at.

“While group sales declined by £200m to £10,144m, this result was softened by the electrical specialist’s ability to transfer many online shoppers back to its stores, satisfying their desire to experience instore demos and get in-person advice. AO of course, being an online specialist, is unable to satisfy this customer need, and reported worse full year results (-6% for the 12 months ending 31 March 2022). Group revenue on a two-year basis remains negative, with this reflecting the demise of its mobile proposition in the UK & Ireland. In comparison, its international business was up 15% on a two-year basis driven by the demand for electrical items during the pandemic, and indeed, indicative that with mobile sales stripped out we would likely see a similar story in the UK & Ireland.

“Group online sales declined by 29% in FY2021/22, as shoppers predominantly returned to pre-pandemic shopping habits. However, with online sales remaining 31% higher than two years ago, this decline in sales will be of little concern to Currys as it enters this next financial year. Investment in enhancing its online proposition, including utilising its ShopLive function that enables online shoppers to talk directly to instore staff, was integral to supporting online growth during the pandemic and will remain a key point of differentiation from its competitors after. Indeed, online penetration, while falling back on FY2020/21, remains 8ppts higher than pre-pandemic levels highlighting the long-term shift to this channel, and ensures further investment will be needed to support this growing demand for shopping via its website.

“Future outlook looks less positive on a backdrop of rising inflation. Investment in non-essential big-ticket items will be limited, indeed the UK electricals market is forecast to be among the worst performing retail sectors in 2022, declining by almost 10%. While it is expected that online specialist players such as AO, which has seen its share price fall around 30% over the past two days on cash flow concerns, will suffer most, Currys will not be immune to this significant drop in demand. Nevertheless, its share price has risen by around 5% in early morning trading reflective of its positive outlook on profits for the new financial year, where it forecasts an improvement of between 3% and 19% in profits before tax in FY2022/23. Purchase motivations for electrical purchases in 2022 will be driven by a need to replace old or broken items and consequently consumers will be looking to make saving where possible, trading down to less premium brands. Currys must focus on highlighting value for money in its stores, with a focus on its own-brand ranges to appeal and support profitability.”





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Following today’s release of Currys’ figures for FY2021/22; Zoe Mills, senior retail analyst at GlobalData, a leading data and analytics company, offers her view: “Given the number of challenges faced this financial year, including supply chain constraints and the ongoing cost-of-living crisis, Currys’ FY2021/22 results are nothing to be scoffed at. “While group sales declined…