Electrocomponents, owners of online and catalogue distributor RS, has warned of weakening demand in the UK market with sales falling by 6% in the last three months.
International sales for the period from 1 October to 19 December also declined and as a result Group sales fell by 5%.
The situation has deteriorated quickly. At the time of the half year results at the start of November the company reported a 3% decline in group sales in October.
“Since then, demand has weakened further. The Purchasing Manager Indices have fallen to record low levels in our major markets and customers are deferring projects and extending plant shut downs,” said the distribution company.
Within International, Europe's performance was consistent across the period whilst both the North American and Asia Pacific businesses moved from sales growth in October to decline in November and December.
However, o a reported basis, Group sales for the period have increased by around 2%.
The company said it was “accelerating cost reduction plans and targeting to reduce the cost base by an annualised £15m in the next financial year.”
One focus will be increasing the online business to improve operational efficiencies. There will also be changes in the European logistics strategy and unspecified local initiatives.
“With our operational efficiency actions, strong balance sheet and continuing progress on implementing our strategy, which is focussed on the two customer groups of R&D and Maintenance, the Group is well positioned to weather the current economic turbulence and deliver longer term growth,” said Ian Mason, group chief executive.