Following today’s release of Wickes’ figures for the 13 weeks ending 30th September 2023; Jamel Boughedda, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Wickes’ results took a hit in Q3, with overall like-for-like (l-f-l) sales falling by 0.2% as l-f-l sales in the do-it-for-me (DIFM – predominantly kitchens and bathroom) category, which has been a key growth driver in recent quarters, fell by 4.4% as its order book normalised and transitioning to new software impacted deliveries. This decline ended a run of nine consecutive quarters of growth, with Wickes indicating that the impact of this new software will likely impact Q4 as well, along with declining orders. Despite Wickes’ investment in this category, such as its new, more affordable Lifestyle kitchen range, DIFM orders slowed in Q3, showing signs of weaker consumer confidence and the resulting impact on big-ticket goods. Despite a weaker quarter, Wickes reiterated its adjusted profit before tax guidance for FY2023 of between £45.3m and £49m.
“Core l-f-l sales continued to recover, up 1.1% and with volumes in growth for the first time since Q2 FY2021. This performance was driven by TradePro which achieved a double-digit sales increase and further growth in its customer base. Given the current macroeconomic challenges and trade’s current upward trajectory, TradePro will likely drive performance out to FY2024 as one of its key customer groups is older homeowners, who are less impacted by rising mortgage costs. However, Wickes cannot afford to relax due to intense competition from B&Q, as it focuses more on trade, and Screwfix’s overall growth. Its store refits to offer quicker fulfilment for trade and 30 minute click & collect will, along with remaining competitive on price, be essential to attract and retain members.
“These store refits are set to continue with four planned for the end of the year along with two new openings in Widnes and Torquay. Wickes’ DIY sales were “moderately down” in Q3, as high inflation and interest rates persist and the fragility of the housing market puts off investment in this area, though it had a strong performance in decorative, tiling and insulation. With no signs of government aid for high energy costs this year, consumers are preparing for the winter months, with investment on insulation likely to continue from last winter. Continued investment in both its stores and IT solutions should deliver stronger sales in FY2024, as the DIY market begins to recover and consumer confidence returns.”
