Following today’s release of ScS; figures for the 26 weeks to 28 January 2023; Matt Walton, senior retail analyst at GlobalData, a leading data and analytics company, offers his view: “ScS has joined DFS in outperforming the upholstery market at the end of the 2022, as it recorded a 5.0% uplift in gross sales in its H1 FY2022/23. As with DFS, ScS experienced a tough summer, with like-for-like orders for the first 16 weeks of the period 9.1% down on last year as the cost-of-living crisis stifled big ticket purchases. Orders grew by 2.6% over the final 10 weeks of the period, with improvements to its supply chain meaning that a greater proportion were delivered, and the revenue subsequently recognised. This momentum continued into H2, with orders up 5.7% for the seven weeks to 18 March 2023. This is a strong performance considering the economic backdrop will have disproportionally affected its customers.
“While a direct comparison between ScS and DFS is challenging due to the differing trading periods, when compared to their pre-pandemic H12019/20 periods, DFS has grown faster with its ability to appeal to a more affluent shopper supporting this. DFS also saw a much stronger growth in orders towards the end of 2022, with orders up 18.8% for the final three months of the year.
“ScS has taken steps to broaden its customer base, with a new marketing message moving away from focusing on price to create a softer appeal that focuses more on product. It has also launched 34 new ranges and three exclusive ranges in collaboration with Ideal Home, with ScS witnessing a slight shift in demographics from these new ranges. It has been awarded the BSI Kitemark for domestic furniture and has also become an Approved Retailer for British Furniture Manufacturers, indicating its commitment to selling British-made products, and helping promote product quality. These are all positive steps and with 2023 set to remain challenging for ScS’ core demographic, widening its customer base will be key to maintaining recent momentum in 2023.
“ScS has developed other parts of its offer to emerge from the downturn stronger, especially in online where sales grew by 16.7%. Pre-purchase research has been a particular focus with shoppers able to pull multiple items together to create an overall look as well as an online visualiser for flooring. Its online penetration of 10.1% remains significantly behind the upholstery market, making its acquisition of online pureplay Snug in January 2023 more pertinent to help further develop its online offer. Beyond its Declutter improvement programme in stores, ScS has rolled out its new format, which showcases its non-upholstery offer more and incorporates online terminals, into its Uddingston and Gateshead stores.
“Flooring remains challenging for ScS, as sales declined for the third consecutive H1, with sales down 37.8% since H1 FY2018/19. The retailer has seen encouraging signs within flooring though, as like-for-like order intake grew by 5.2% in the period, as improvements to its offer start to resonate with shoppers. This includes the launch of a wider range of hard floorcoverings and giving greater staff and fitters training on 20 “Star-Buy” products.”
