More people are renting gadgets than buying them outright due to the cost of living crisis, according to a popular shopping website. MusicMagpie said that over the past year it had added an extra 16,500 subscribers to its rental subscription service, where people can rent a refurbished phone for a lower monthly price then return it once the rental ends.
The resale company sells used phones and electronics as well as CDs, DVDs and Blu-Ray discs. Chief executive of MusicMagpie, Steve Oliver, said: "In light of the continuing squeeze on consumer spending, we believe that device rental subscription services will become an increasingly attractive option to a wider range of consumers seeking to replace their non-discretionary technology products in a cost-effective way."
The business said its profits dropped to £19 million from £23 million in the first half of this year compared to the same period in 2021. Its revenue also fell to £71.3 million from £72.8 million, a decline the firm blamed on fewer customers buying music and books than during lockdown, when people were looking for ways to occupy their time at home.
Consumer technology makes up nearly two thirds of MusicMagpie's entire revenue and was up 15.9% to take in £46 million in the first half of the year. Shares in the company dipped by more than 10% following the trading update.
Mr Oliver said: "Notwithstanding the challenges presented by the current macroeconomic uncertainty, we expect consumers will continue to seek ways to raise cash and save money. As a result, we are confident that the business is well positioned for future growth in the second half of 2022 and beyond."
Last week the Office for National Statistics inflation reached 9.4% in the UK in June. Households are cutting back on non-essential spending as people prepare for even higher costs and energy prices ahead of autumn, Nationwide Building Society said this week.
