Following today’s release of Wickes’ figures for the year ending 31 December 2022; Jamel Boughedda, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Wickes had a solid FY2022 as its total revenue grew 1.8% to £1.6bn, whilst like-for-like sales grew 3.5%, especially considering it was against comparatives of extremely high levels of demand during the pandemic. The retailer’s performance revealed an outperformance of its do-it-for-me (DIFM) segment as it broadened its customer appeal and navigated a challenging macroeconomic market, with a strong recovery as it successfully worked through its order book. Despite slightly fewer orders being made over the course of the year, sales in DIFM increased by 23.6%, in contrast to its core revenue which fell 3.8%. The retailer benefited from starting the year with a stronger order book due to a backlog from COVID-19, and from effectively expanding its reach through a wider range of online initiatives to meet consumer demands, which will be vital going into FY2023 as consumer spend will continue to be tested.
“However, despite resilient demand, Wickes’ adjusted operating profit fell 10.7% to £103.9m. The DIY boom that defined much of the pandemic has died down, impacting profits not only for Wickes, but also rival Kingfisher, suggesting that 2023 will be a difficult period for DIY players.
“Wickes’ DIY sales recovered towards the end of the fourth quarter after a softer performance in the second half of the retailer’s year. This was aided by growth in sales of energy-saving products such as insulation, smart meters, and lighting, as customers continued to search for alternate ways to keep warm over winter and reduce their energy bills. The retailer’s improvements to its online proposition such as the introduction of its 30-minute click & collect service, Klarna payment options, and the launch of the Wickes eBay store will be crucial to entice consumers to buy big-ticket items, as well as broadening its online presence and potential customer base. Wickes’ digital TradePro membership also performed well, growing its memberships by 112,000 in 2022, increasing its total to 746,000 as consumers become more conscious of rising material costs and search for discounts during the cost-of-living crisis.
“Wickes reported trading in line with expectations for the first 11 weeks of 2023, with core sales moderately behind last year. DIFM sales are slightly ahead of FY2022 as Wickes entered another year with an elevated order book, although it must remain mindful of the macroeconomic backdrop as cost pressures remain and demand is still threatened. Although consumer willingness to purchase big-ticket items is low, those who are unable to buy houses due to high mortgage rates are likely to undertake DIY projects to improve their own houses, bolstering the market’s resilience.”
