City comment: AO World and Pets at Home show we’re in for a K-shaped Christmas

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It’s that time of year when A Christmas Carol returns to our screens but when reading today’s corporate results another Dickens classic comes to mind: A Tale of Two Cities.

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Updates from two retailers reveal that the city literally has and doesn’t have a lot: those who have stock, and those who don’t.

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The first camp has Pets at Home. Retailer Bumper is gearing up for Christmas following the start of the pandemic in a plethora of new pet owners. Many are expected to pamper their fur babies. At-Home Pets plans to take advantage (really — check it out) by stocking up on dog treats and festive harnesses for cats.

Then there’s AO World, which is struggling to catch up to PlayStation and is seeing the cost of things like fridge rockets due to supply chain squeezes.

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As a result, investors are jumping on AO’s stock. The business is days away from Black Friday sales and in the midst of Christmas trading. Retailers make most of their money for the entire year during these critical few weeks.

Economists talked about a two-speed recovery for the economy after the pandemic: tech and other resilient “knowledge” businesses went ahead, while the likes of hospitality and entertainment stagnated or even stagnated under restrictions. As the effect shrunk. In Argot, this is a K-shaped recovery.

Seeing this, retailers may be in for a K-size Christmas: Those who can get stock must have quid as the celebration-hungry Brits go out. Those who cannot face the thin gruesome on December 25.

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