Even pawnbrokers are having a hard time on the High Street, with Albemarle & Bond warning that the lower gold price has caused an unexpected slow-down in the growth of sales of the yellow stuff.
The firm said that in the last eight weeks of the second half of its financial year the year-on-year percentage growth rate, in terms of the value of gold bought, has slowed 'significantly' to middle single digits, compared with a rate of more than 50% in the first half.
The recent marked slowdown in gold buying activity, combined with a lower prevailing sterling gold price, has had an immediate impact on both volumes and margins, the firm said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
"Whilst revenues have still grown in this period, this has been at a level below our expectations, particularly given strong trading up to the end of March. As a result, the board therefore now expects the company's profitability for the full year to increase, but to be below current market consensus," the company added.
"It is too early to tell if this is a reflection of the reduction in footfall from the very wet weather in the period, or a developing trend. The company has consistently taken a flexible, asset light approach to gold buying and is monitoring developments closely and taking appropriate mitigating action. Effective management controls have already been implemented to reduce the growth across the group's cost base."
The group was keen to emphasise that all other business divisions are trading broadly in line with the trends reported in the half year results, although it has also seen improvements in fourth quarter trading from the Retail division and a slower rate of growth from Speedloan, its medium term unsecured lending product.
Chief Executive, Barry Stevenson, commented: "Whilst the very recent trends in gold buying are disappointing we are very focused on driving income growth out of our expanded store base and exercising rigorous cost controls.
"The group is well positioned to respond to changing market dynamics and satisfy the fundamental demand for short term cash and credit from a potential around 10m UK consumers. The company expects to report final results in September and we look forward to providing a further update on strategy at that stage."
The share price fell 8.7% to 252p by 12:41.
Bitcoin hits new heights - is now a good time to invest?
The value of Bitcoin has surged to a 20-month high. Why is Bitcoin rising and is now a good time to invest?
By Vaishali Varu Published
Gold hits record high - could it soar higher next year?
The yellow metal has hit a new all-time high. We look at market expectations for 2024, whether investors should sell and take profits, and how to invest in gold.
By Ruth Emery Published