Following today’s release of Victorian Plumbing’s results for the 52 weeks ending 30 September 2024; Matthew Walton, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Victorian Plumbing has stayed the course amidst a challenging consumer backdrop to record a 3.7% increase in sales for its FY2023/24 with sales of £295.7m, driven by its acquisition of Victoria Plum in May 2024 which added £14.7m in revenue. When excluded, the retailer’s like-for like sales fell by 1% as shoppers focused on making smaller purchases. Orders increased by 9.5% during the year, whilst average order value declined by 5% as shoppers migrated from third-party ranges to its lower-cost own brand products, which accounted for 79% of sales, up 1ppt on last year. This shift to own brand boosted its gross margin, which was 3ppts higher at 50%. Operating profit fell by 26.8% largely due to a £3.1m operating loss from Victoria Plum.
“Trade outperformed consumer sales on a like-for-like basis, with trade sales up 7.6% to £64.0m to make up 23% of revenue, a 2ppts uplift on last year. In contrast, consumer sales fell by 4% over the year. With competitors such as Plumbworld having a greater split of trade sales, there is significant growth potential for Victorian Plumbing in this area. The retailer is aiming to achieve this through using more targeted radio advertising campaigns, expanding its ranges to be more relevant to trade shoppers and utilising its dedicated trade team to better serve customers in this area.
“Marketing spend as a proportion of revenue increased by 0.9ppts to 28.7% this year driven by an increase in offline advertising, including sponsorship of the UK Snooker Championships. This investment has been a success with the retailer’s internal measure of brand awareness increasing by 2ppts to 66%. Investing in marketing is a key balancing act for online pureplays as they need to stay top of mind among shoppers without the support of a national physical presence. However, Victorian Plumbing must maintain a handle on this spend to ensure that it avoids the same trap as other pureplays such as Wayfair and some of the mattress-in-a-box brands where it is unable to dial back marketing spend, potentially becoming a drag on profitability.
“Current trading has been positive with sales up 3% for the three months to December 2024. This was driven by a high single digit performance in December as shoppers remained cautious in October and November. Victorian Plumbing’s prospects remain strong for the remainder of its FY2024/25. The decision to shutter the Victoria Plum brand removes confusion between the two brands, with the retailer redirecting traffic from Victoria Plum’s website to its main site in November 2024. A new 544,000 sq ft distribution centre came online at the end of December which will help it overcome previous capacity constraints and enable it to extend its presence in newer categories such as tiling and lighting, where sales grew by 23% to £12.4m. Improving consumer confidence and the uplift in housing transactions should also boost demand for customers to renovate their bathrooms.”
