(Reuters) – British kitchenware brand ProCook Plc said on Wednesday its sales from Black Friday and early Christmas shopping were weaker than last year, as customers cut down on spending amid a deepening cost-of-living crisis.
Soaring inflation in Britain, driven by the rising costs of everything from food to fuel, has forced consumers struggling to pay their bills to tighten their belts during the holiday period.
In November, British shoppers focused on core grocery essentials and avoided more discretionary Christmas items, market researcher NielsenIQ said.
“Whilst traffic and footfall remain reasonably strong, conversion rates, both in-store and online, continue to be significantly down year-on-year,” ProCook said.
The company saw a loss of 2.8 million pounds ($3.47 million) as customers limited their shopping to essentials. Gross margin in the first half declined to 61% on increased shipping and transport costs, as well as impacts from foreign exchange.
“We are taking cost actions to manage the current pressures,” Chief Executive Officer Daniel O’Neill said.
The company said it has initiated a plan to reduce operating costs by 3 million pounds on an annualised basis.
“The market was down by over 6% in the period, so making much progress was always going to be tough, especially as there was such a dent to gross margins from shipping,” analysts at Peel Hunt said in a note.
ProCook, which is in the process of exiting the Amazon marketplace, said revenue in the first eight weeks in the second half of the year beginning Oct. 17 was 5.7% lesser than a year ago.
Last week, the company cut its revenue outlook and said it expects underlying profit before tax to be about breakeven in the full year.
($1 = 0.8078 pounds)
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Rashmi Aich and Janane Venkatraman)
