Asos blames Royal Mail postal strikes for slowing UK growth

by Noelle McElhatton, marketingdirectmag.co.uk 17-Nov-09, 13:23

LONDON - Asos, the UK's largest online fashion retailer, has blamed the Royal Mail strikes for stunting its sales in recent weeks.

The company reported profit of £4.4 million for the six months to September 30, up 9 per cent on the same period last year, on revenues of £96.5 million, up 47 per cent.

But the company said the disruption caused by postal strikes slowed sales growth in Britain to 23 per cent in the seven weeks to November 15. Asos also blamed the weather, rising youth unemployment and credit card debt for the decline in growth.

However overseas sales helped to make up the shortfall, Asos said. Sales to consumers based in America, Denmark, France, Germany and the Republic of Ireland grew, with the company planning to launch country-specific sites next year.

Total sales, including international sales, grew 46 per cent this year compared to 100 per cent for the same period a year ago.

The news comeas as Asos launched ASOSreviews.com, a Twitter-powered feedback and reviews micro-site. The launch follows the debut of ASOS Life, an online community that facilitates interaction and conversation between the brand and its consumers.

Online retail industry body IMRG said that some 85 per cent of online retailers believe that the postal strikes and the threat of further disruption discouraged customers from placing orders.

Asos, like all home shopping sites, made alternative delivery arrangements during the strike days in October and early November

Nick Robertson, chief executive of Asos, said in the Times today: "All the companies we speak to will do everything they can to avoid using Royal Mail. But the reality is, customers don't necessarily join those dots together."

The strikes were called off by the Communication Workers Union until the New Year so that negotiations with Royal Mail could resume.