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Travis Perkins consumer division (incl. Wickes) reports 1% LFL rise

Travis Perkins Consumer Division:

Revenue 2013: £1,180m
Revenue 2012: £1,152
Change: 2.4%

LFL growth 1.0%

Segment profit 2013: £63m
Segment profit 2012: £65m
Change: (2.7)%

Operating margin 2013: 5.3%
Operating margin 2012: 5.6%
Change: (0.3 )pp

Revenue in the consumer division increased by 2.4% in the year despite a challenging
customer environment and inclement weather throughout the first quarter.

Sales improved throughout 2013, following the protracted cold weather at the start of the year. The improvements in gardening related sales in the summer were however less marked in Wickes given its limited range in outdoor categories.

Wickes:

Wickes continued to invest in lower prices through its red pencil price reduction programme and stronger promotional deals. Wickes price investment accelerated in the second half with volumes growing as a result, however, gross margins were impacted by these investments. Improvements in sourcing, changes in the distribution of ordered bathrooms and the removal of the Mycard reward programme helped reduce the impact of the greater price investment and deeper promotional offers.

Wickes increased its focus in reducing operating costs and in doing so reduced its cost to sales ratio during the year. Good progress was made in consolidating warehouse operations, improving labour productivity following the introduction of auto-replenishment systems and through the downsizing and sub-letting of oversized shops. Four stores were relocated or downsized during the year and two new stores were opened. New web and mobile platforms were introduced, offering customers a better online shopping experience.

The significant investments in pricing and promotional offers meant Wickes 2013 profit declined modestly compared to the prior year.

Toolstation:

Toolstation had another encouraging year of sales growth and network expansion. Double digit LFL revenue growth was driven by a continued focus on customer service, strong availability and investments in ensuring the lowest prices in the market.

Although it is still early in the development of the proposition, Toolstation implants in Wickes appear to be resonating well with customers. These implants are helping Wickes drive additional footfall and are contributing to rent costs. Toolstation is benefitting from Wickes footfall thereby achieving profitability faster than in many of its new standalone shops.

Source: Travis Perkins PLC
www.travisperkinsplc.co.uk

26 February 2014
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