Wickes achieved record sales in the first half of this year, benefitting from its value proposition and underpinned by its balanced business model, according to the Group’s latest trading update. Despite lower market volumes the DIY retailer maintained its track record of achieving market share gains in its core business, with the growth of its TradePro customer base a particular feature. DIFM ordered sales were up modestly in the first half, with delivered sales benefitting from working through the elevated order book.

Revenue for the 26 weeks to 2 July 2022 was £822.3m, an increase of 1.3% on the prior year. Against tough comparatives, Core sales declined by 5.1% to £632.6m, with DIFM delivered sales increasing by 30.6% to £189.7m, reflecting a disrupted H1 2021 in which showrooms were closed for several weeks. The shift in the first half calendar this year following the 53rd week last year added £5.4m to reported sales, and there was a modest reduction in the contribution from space from the closure of three stores. Comparable period LFL sales (weeks 1-26 this year versus weeks 2-27 last year) increased by 0.8%.

Core LFL revenue declined by 5.5% over the period, although was 36.3% ahead on a three-year basis. Our long term trend of market share gains continued in the first half (source: GfK), with particularly strong performances in hardware, decorative and garden. The company’s performance strengthened from Q1 into Q2 both on a one-year and three-year basis, although, as mentioned in the trading update of 26 May 2022, some of the one-year improvement was the result of a later Easter in 2022.

Gross profit for the first half was £292.6m, down from £294.8m last year. Gross profit % declined by 70bp to 35.6%, a similar rate of decline to that seen in FY2021. The key drivers were again inflation and product mix, the latter reflecting a higher mix of TradePro sales.

Despite the full lifting of Covid restrictions in the period compared with the first half last year, many market changes brought about by the pandemic have remained. Many businesses have retained hybrid working practices, increasing the dwell time at home, fuelling further desire for homeowners and tenants to invest in their properties. While there are well-documented challenges facing the consumer, home improvement remains an attractive and large market worth £26.5bn.

Market fundamentals remain strong, underpinned by full employment and a healthy property market with the ongoing need for RMI (Repair, Maintenance and Improvement) investment and interest in making properties more energy-efficient, all supporting project work in the home. With high levels of price inflation, driven by global factors including energy inflation and supply chain disruption, market volumes have declined in the first half. Looking forward, our most recent Mood of the Nation survey indicates a moderate slowing of demand for home improvement from its post-Covid levels, order books for the trade remain very strong, with around 25% of those surveyed having order books for 12 months or more.

The home owning demographic into which Wickes’ Local Trade and DIFM end propositions face also leave the business well placed to continue to take share. Although as yet Wickes has seen little sign of trading down or rising own label participation, its surveys tell it that customers are becoming more discerning on price and are shopping around more. Wickes believes that its value credentials, the strength of the Wickes brand, its simple and clear pricing policy, alongside its 10% flat rate discount to all TradePro members, stands the business in good stead as market conditions become more challenging.

Despite the well-documented industry shortages in certain categories in the first half, strong supplier relationships, curated range and operational agility served Wickes well to continue to provide customers with the products they need. Together with its price leadership and own brand credentials, it believes a strong focus on availability helped to drive increased awareness of Wickes, as reflected in its core market share gains and the strong performance in sales to TradePro members, which increased by 20% during the first half.

Wickes has also continued to grow the proportion of its digitally-enabled sales on a year-on-year basis. It completed a number of enhancements to its digital capabilities in the first half of 2022, including greater use of push messaging, personalisation and targeted campaigns across all digital channels. Underpinned by its predictive Missions Motivation Engine, Wickes has also stepped up the digital experience for its trade customers, increasing the levels of engagement throughout the project journey. Increased usage of social campaigns and display marketing has also grown the awareness of the TradePro mobile app.

During the first half of the year Wiceks successfully launched its Wickes eBay store with 4,000 lines, extending its customer reach.

David Wood, Chief Executive, commented: “This was a half in which we achieved record sales, as customers continued to be attracted to our market leading value, choice and availability and I would like to thank all my colleagues for their hard work and support in delivering these results. While market volumes have declined, we have made further market share gains and delivered a particularly strong performance in Trade, with an acceleration in the rate of sign-ups to our TradePro membership scheme. 

“In DIY, we continue to cater for an increased number of younger customers who first turned to home improvement during the pandemic, while in DIFM, delivered showroom sales have remained robust as we launched new kitchen and bathroom ranges and worked through the elevated order book. 

“As previously stated, we have seen some softening in the DIY market from the very high levels of demand experienced during the pandemic. However, we continue to outperform the wider home improvement market and our confidence in our long term strategy is unchanged, reflected in our continued investment to drive further growth.

“Looking ahead, we remain confident that our uniquely balanced business model, coupled with our market-leading value, leaves us well-positioned within a large and growing home improvement market.”