Retailer Marks Electrical has warned investors that its yearly profits will be squeezed as consumers remain cash-strapped and it faces rising staff costs.
The online seller of electrical products, from ovens and dishwashers to TVs and coffees machines, said it was “disappointed” by its recent sales performance.
Over recent months, sales of its two categories – major domestic appliances and consumer electronics – were lower than the same period a year ago.
Marks said revenues have been declining throughout 2025 since it decided to shift away from lower-priced products and focus more on “premium” items, which can generate more cash.
It said this adjustment was impacting sales at a time when consumers have been spending less when they shop.
“We have also continued to see consumers remaining highly price conscious and scaling back on discretionary spending,” the retailer said.
This has lowered the average value of each order, driving up relative delivery costs.
Marks said it was being squeezed by a barrage of higher business costs including improving its technology and IT systems, and also by higher staff costs.
Many businesses have seen labour costs rise due to an increase to the rate of employer national insurance and a higher national minimum wage, both coming into effect in April.
Marks said it expects revenues to return to growth over the second half of the financial year.
But the weaker performance over the first half will have a “material impact” on its full-year profit guidance, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) forecast at around £1.7 million.
This would be a drop from £4.2 million in the last financial year.
Chief executive Mark Smithson said he was “very disappointed” that sales had continued to decline into the new financial year.
But he added that “as the economic environment and market backdrop improve” he was expecting to see spending tick up again.
