Marks Electrical has announced a more cautious outlook for annual sales and profitability as consumers reduce spending amid concerns over the cost of living and unemployment.
World Cup Boost Not Enough
The online electronics retailer reported a recent boost in sales of televisions and sound systems due to the World Cup. However, overall consumer confidence remains weak, attributed to UK inflation, interest rates, and unemployment impacting disposable income, along with concerns about the Middle East conflict's effect on living costs.
Shares Fall 7%
Shares dropped 7% after the company said it is taking a cautious approach to sales growth and gross margin for the coming year.
This follows a Competition and Markets Authority (CMA) order for Marks Electrical to refund nearly 40,000 customers and pay a £720,000 fine for automatically opting customers into extra services without their agreement. The retailer will pay affected customers an average of £15 each, totaling around £600,000, for signing them up to its “Recycle Old Appliance” or “Unwrap & Recycle Packaging” services, or both, without express consent.
Financial Results
Full-year results for the year to March 31 showed Marks Electrical narrowed pre-tax losses to £366,000 from £1.7 million the previous year. Revenues fell 7.9% as the firm strategically reduced its marketplace presence to focus on its own website and internal telesales. However, performance improved in the final six months, with sales rising 5% in the second half.
CEO Mark Smithson said: “After a challenging first half, we delivered an improved second half performance thanks to disciplined focus on margin and operational cost management. We are well positioned heading into 2026-27 with positive trading momentum and a strengthened cash position. We remain mindful of macro-economic factors like inflation, interest rates, and unemployment, which create trading headwinds we must navigate.”
