AO World enjoys sales leap amid ‘structural’ shift online amid pandemic

Retailer AO World has said it has seen no sign of a slowdown in demand for online electricals despite rivals reopening stores after lockdown restrictions eased.

The group reported a 58.9% hike in UK sales to £401.3 million for the four months to the end of July and insisted the shift towards internet shopping during lockdown had become “structural”.

Its sales in Germany almost doubled, up 91.5% at 74.3 million euros (£67 million).

Shares rose more than 3% higher after the update.

AO World has emerged as one of the retail winners so far of the coronavirus crisis, having seen demand for TVs, laptops and electricals soar during the lockdown.

John Roberts, founder and chief executive of AO World, said: “Despite stores reopening, we are experiencing sustained momentum as customers continue to choose AO.

“This reaffirms our belief that this is a structural shift in demand where customers have found a better way to shop the category with AO.”

He added the group planned to continued investing to support the recent surge in demand.

But on a more cautious note, he said the outlook remained “uncertain” amid the ongoing pandemic and with the Brexit deadline at the end of the year.

“We remain cognisant of the significant level of economic and customer uncertainty driven by both Covid-19 and the prospect of Brexit in December and the impact this may have on demand for electricals in the medium-term,” the group said.

Analysts at Numis hiked their full-year forecasts, pencilling in revenue growth of 40% for the UK and 35% for Europe and predicting underlying earnings of £57 million, up from the £48 million they previously forecast.