AO World shares 20% drop as customers void warranties Business

Shoppers are rushing to void their repair warranties on electrical appliances to save money, amid an escalating cost of living crisis.

AO World, which sells toasters, TVs and fridges, said last month there was a spike in cancellations as customers tightened their belts to cope with utility bills and costs. groceries higher.

It comes after nearly a quarter of Britons said they struggled to pay their household bills, data from this week showed.

Cash-strapped shoppers have canceled subscription services such as Netflix and Disney+ and are buying more own-brand food from supermarkets.

Although the situation has improved since March, the company warned that the trend could have a significant impact on earnings.

AO World was a Covid winner as shoppers flocked to its website to buy the latest gadgets when forced to work from home.

However, the shares lost a fifth of their value, trading at 70p, after issuing a profit warning on Friday, in stark contrast to highs of 429p in January last year.