Following today’s release of Wickes’ figures for the six months ending 29 June 2024, Matthew Walton, senior retail analyst at GlobalData, a leading data and analytics company, offers his view: “Wickes’ challenging start to 2024 has continued as sales from its Design & Installation category, which includes sales of kitchens and bathrooms, declined by 17.0% in its H1 FY2023. This follows the 13.7% decline it recorded in Q4 2023, and more than counterbalanced a 1.0% rise in its core Retail offer. This is a disappointing set of results, especially considering its limited exposure to gardening compared to other DIY retailers.
“Wickes has underperformed in both kitchen & bathrooms for the first six months of 2024. Howdens, whilst outside our definition of kitchen furniture as a trade retailer, reported a 4.3% increase in UK sales on a +0.6% comparative for the 24 weeks to 15 June 2024 and other retailers have indicated shallower declines. Meanwhile in bathroom furniture, Victorian Plumbing recorded a decline of 4.2% in consumer sales for the six months to March 2024. The market has been tough as the cost-of-living crisis has caused shoppers to remain cautious with their spending, especially in big-ticket areas. The weak housing market, with residential purchases only increasing by 1.0% in H1 2024, also stifled growth. Consumers being more price focused has been iterated by Wickes’ entry-level offer, Lifestyle Kitchens, achieving 18.8% growth year-on-year. Wickes should aim to factor in more design elements into its offer as the market is set to improve, with shoppers more able to trade up. Figures from GlobalData’s quarterly home tracker show that buying to achieve a new look was the main purchase motivator for kitchen shoppers.
“The Retail segment’s growth has been driven by trade, with Wickes’ TradePro offer seeing double-digit increases in both sales (14%) and active members (18%). However, with B&Q aiming to appeal more to trade shoppers through its TradePoint offer, Wickes must continue to develop its offer, through remaining competitive on price and simplifying the ordering and collection process further. When trade is stripped out, the retailer’s DIY sales declined slightly as shoppers continued to focus on conducting smaller projects and home refreshes, highlighted by interior paint being up 13% for the first 16 weeks of the year.
“There are positives to take from these results, despite the challenging topline performance. Wickes’ profit outlook remains unchanged as its planned efficiencies and previous measures help keep costs under control. The economic conditions in the UK are also improving, with figures from EY ITEM Club’s Summer Forecast showing that growth in average earnings will outpace CPI by a greater margin than previously forecast. Figures from GlobalData also indicate sizable year-on-year improvements in consumer confidence surrounding making big-ticket purchases, which will support spend growth later in the period. The acquisition of Solar Fast, which was completed in May 2024, also offers a potentially lucrative revenue stream as sustainability becomes a greater consideration for customers and the new Labour government prioritises sustainable energy.”
