Following today’s release of The Very Group’s figures for the 39 weeks ending 30 March 2024; Tash Van Boxel, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Amid muted spend at the beginning of 2024, the Very Group stumbled, with total revenue falling 0.8% to £1,667.2m in Q3 YTD FY2023/24. This poorer result was due to a continued decrease in its Littlewoods sales, which fell 11.9% to £174.5m. While its Very UK revenue growth remained positive, up 1.0% to £1,440.6m for the Q3 YTD period, it has decelerated over the financial year. Very Pay continues to thrive, with revenues up 3.2% as consumers continue to turn to finance options. Though this is still a small part of the business, The Very Group must continue to promote its financial services to bolster average basket size and boost spending. In the lead-up to wedding season and the summer months, consumers are likely to welcome the reprieve on their finances by being able to spread the cost. With the UK online market expected to grow in 2024, according to GlobalData’s latest forecasts, Very must focus on campaigns such as its Flamingo-themed summer marketing campaign to take advantage of this and ensure it is a destination across its range.
Very UK retail sales saw a slight decline of 0.4% in Q3 YTD FY2023/24, with fashion, sports and home continuing to pull down its performance. Fashion and sports sales declined 4.9% in the period, despite demand for premium fashion remaining high (up 19.4%). However, given that 68% of consumers stated that they bought more or the same amount of premium clothing in the last 12 months, according to GlobalData’s May 2024 consumer survey, Very should continue to expand these ranges to support its sales. Furthermore, the UK online clothing & footwear market grew at an average rate of 0.6% over the last six months, according to GlobalData, indicating that not all online players were struggling. Indeed, Very’s difficulties in this sector outside of premium fashion may be due to consumers turning to multichannel players to shop across channels through services such as click & collect. Delivery options such as nominated day delivery can support growth, allowing consumers greater flexibility on when they are home. However, this incurs a high charge at Very and it could act as a deterrent for conversion if shoppers are unsure they will be in to receive an order. Home sales have also fallen in the period, down 1.7%, which can be attributed to a weak performance in gardening as unfavourable weather conditions dampened demand. Indeed, the bank holidays in May, which fall outside the trading window, will have done little to boost gardening demand in Q4 due to the rainy conditions at the beginning of the month and the same cooler and rainy weather forecast for the second long weekend.
However, Very UK’s focus on toys, gifts and beauty has reaped benefits, growing 4.9% in the period, bolstered by strong performances in personal care (+20.4%), toys (+9.1%) and fragrance (+8.7%). While this is still a developing category for Very, demand for it has been consistent, indicating that further investment into expanding ranges across toys, gifts and beauty will be fruitful for the online pureplay, especially for its beauty offer given that the health & beauty market is forecast to grow by 6.4% in 2024. Its more established electricals category, which still accounts for 45.8% of Group sales, has also achieved growth in the period, with revenue up 1.2%. This result was driven by demand for gaming and computing items, and with a new, cheaper version of the Xbox Series X forecast to launch in the summer of 2024, we can expect this demand to be sustained going into Q4.”
