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Wickes grows market share

Despite a tough retail climate and weak demand in kitchen and bathroom, Wickes reported a increase in like-for-like sales and market share in the first quarter of 2011.

The Travis Perkins-owned business saw a 3.1% rise in sales for the 17-weeks ended April 30, with like-for-like (lfl) figures up 1.9%.

In the interim management statement, issued today, Travis Perkins said the market had "continued to deliver little or no growth" during the first quarter. However, its own 'organic development strategy' helped grow like-for-like market share for Wickes, as well as in the group's merchanting divisions, which includes Travis Perkins, BSS and Plumbing Trade Supplies (PTS).

While gross margins in the merchanting division were slightly diluted, Wickes' margins saw an improvement. The retail chain also saw a 5.9% lfl uplift in core product - an area that now represents around 80% of the business. However, kitchen and bathroom sales were hit by weakened consumer confidence for major purchases, seeing a 12% decline for the period and impacting negatively on lfl sales figures for the last nine weeks of the quarter, which were down 1.2%.

Travis Perkins added 14 new outlets during Q1, two of which were Wickes stores, taking the total number of outlets in the chain to 197.

The group reported a 5.9% increase in turnover, with strong sales in its merchanting division, up 11% overall and 10.4% on a lfl basis. Travis Perkins has put a strong focus on cash generation and managed to reduce its net debt by £50m in the four-month period.

Travis Perkins chief executive Geoff Cooper said: "After strong early progress against weak weather-related comparatives, we are pleased with the overall progress the group has made in the first four months of this year. Current trading is in line with management expectations with the benefit of strong sales performance balancing a slightly lower gross margin in merchanting.

"We continue to take market share against a tough market backdrop, confirming the sustainable strength of our organic growth strategy. Our more positive merchanting and BSS performance is more than balancing the effect of a challenging consumer environment for our retail business"

Source : DIY

09 May 2011
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