AO World’s CEO Slams the Autumn Budget: Cost Overload Ahead!
Why the Budget is a Retail Wake‑Up Call
John Roberts, founder and chief executive of the online electrical retailer AO World, has thrown a big red flag at the Labour Budget. He says the new fiscal plan will hit the company with a whopping £8 million in extra wage costs – £4 million from higher wages and another £4 million from the jump in employers’ National Insurance contributions.
Prices Will Rise (No Excuses)
- Inflationary slide: Roberts warned that the Budget is “extremely inflationary for retailers.”
- Price hike inevitable: He’s not worried about cutting staff or slashing costs – the only way to keep the books balanced is to pass the extra spend onto customers.
- Ask the market: “Is anyone naive enough to think that will not follow into pricing?” he said.
Efficiency Over Cutting
Roberts isn’t letting the budget doom the business to cost‑cutting. Instead, he wants to “drive efficiencies” and grow the business. He stresses, “From our point of view, it’s about how do we drive efficiencies and how do we grow as a business.”
Why We’ll Still Have to Pay a Little More
AO World’s strategy is guided by the fact that most of its sales come from “non‑discretionary” items – stuff like fridges, tumble dryers, and air‑conditioning units. In an inflationary moment, customers simply need the essential gadgets, so retailers are forced to crank up prices.
He summed it up with a quirky pop‑culture reference: “If your fridge goes on strike, you’ll probably buy another one.”
Financial Performance: A Quick Hit‑List
- Annual earnings soar: First half results show a 305% jump in pre‑tax profits to £17 million and revenues rose by 6% to £512 million.
- Summer sales mix wobble: Roberts joked about a “Morecambe and Wise summer”—great volumes, but the wrong categories: fewer fridges and AC units sold thanks to rainy weather, but more tumble dryers.
- Team triumph: He praised his staff for turning that uneven mix into a “satisfying score draw.”
What the Office Is Doing Next
Roberts says the team is already “preparing for spending to pulled‑back” as the country gears up for the Budget’s £40 billion tax grab. Even in these tough times, AO World is sticking to its mission: keep the power outlets full and the customers happy.
In short? Brace yourselves – the Budget’s cost hike is real, but with a clear plan to keep the lights on (and the prices steady).
