(Bloomberg) --
AO World Plc’s goal to become the best electrical retailer in Europe hit a stumbling block as the company said it will review operations in Germany.
The online seller of dishwashers, toasters and other appliances blamed fierce competition, digital marketing costs, shoppers’ return to physical stores and supply constraints in a statement Thursday. Those trends will probably continue for the foreseeable future, it said, prompting a review that will “evaluate a range of options.” The stock fell as much as 7.4% in London trading.
AO World is the latest overseas retailer to struggle in Germany, the continent’s largest consumer market. Rival B&M European Value Retail opted to sell its loss-making business Jawoll in 2020 after failing to replicate its U.K. success.
Primark, the value clothing retailer making inroads into Europe, has had to work harder to win over consumers in Germany, which has a highly developed discount market and shoppers who are more demanding when it comes to ethical standards.
Even Walmart Inc., the world’s largest retailer, withdrew from Germany in 2006 amid competition from discounters Aldi Group and Lidl.
AO World entered Germany almost eight years ago, bullishly bringing forward the launch by six months and predicting the success of its “straight cookie-cutter copy of our U.K. model.” John Roberts, founder and chief executive officer, said at the time that “no one could possibly have dreamt we would do what we said we were going to do, and this quickly.”
The company kept its full-year estimates unchanged.
©2022 Bloomberg L.P.
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