Following today’s release of The Works’ figures for the 21 weeks ending 29th September 2024; Aliyah Siddika, Retail Analyst at GlobalData, a leading data and analytics company, offers her view: “The Works has not started this next financial year on a solid foundation as it continues to underperform despite the improvement in consumer spending within the stationery market forecast for 2024. The retailer has experienced a modest 0.2% rise in like-for-like sales during the first half of the year to September 2024, a deceleration from the previous year’s 1.6% increase. This softer result indicates a missed opportunity to capitalise on the demand for arts, crafts, and entertainment activities for children during the summer holidays and stationery products ahead of the back-to-school period. Amid tough competition from value retailers, B&M and Home Bargains, The Works must differentiate its product offer to compete effectively.
“There is potential for The Works to see an increase in sales in the latter half of the year, as it faces a weak comparative period that saw its like-for-like sales decline by 2.8% in H2 FY2023/24. The arts, crafts and stationery specialist has addressed capacity issues in its distribution centre, which should contribute to improved profitability. The retailer’s emphasis on its value proposition ahead of the holiday season by reintroducing its 2 for £12 gifting range will also bolster its performance as it recognises that value for money is a key consideration. Yet, The Works must look beyond short-term trends, such as stocking popular books from platforms like TikTok. This trend-driven approach is evident in the recent launch of the #TimeWellSpent strapline, which capitalises on the interest in activities like colouring and crafting among adults and families. While this strategy may work for retailers targeting adult consumers, it may not align with The Works’ broader target market, which includes young children. To better resonate with its audience, The Works must consider expanding further into the toys & games sector. This investment in toys & games could prove crucial as WH Smith continues to add Toys R Us concessions to its stores, bringing the nostalgic retailer back to more UK shoppers in time for the festive season.”
