Wickes Reports Strong Sales Amidst Consumer Caution on Kitchen Upgrades
The DIY retailer saw growth in core product sales but a slowdown in bespoke kitchen installations as rising prices prompt customers to delay larger purchases.
Wickes has announced robust sales figures, driven by strong demand for timber, roofing, and garden products. However, the company noted that customers are becoming more hesitant regarding bespoke kitchen upgrades, with sales in its design and installation arm remaining flat.
The DIY retailer reported that total group sales increased by 4.5% to £439 million for the three months ending September 26, compared to the same period last year. This growth has been attributed to strong performance in its core DIY offerings.
Despite the overall positive sales momentum, Wickes acknowledged that its bespoke kitchen ranges, which typically start around £4,000, are experiencing a slowdown. Customers are reportedly exercising caution for larger expenditures, opting instead for more affordable, ready-to-fit 'lifestyle kitchen' options and bespoke bathrooms. This trend suggests a shift in consumer spending priorities as household finances face increasing pressure.
The company also indicated that 'mild price inflation' is beginning to emerge after a period of deflation. This subtle increase in costs may further influence consumer decisions on significant home improvement projects.
David Wood, chief executive of Wickes, stated that the company's increasing market share reflects the effectiveness of its value-driven strategy and its ability to compete effectively. "Our continued market share gains demonstrate the strength of our value-led proposition and our ability to outperform in a competitive market," Wood said.
The trend observed by Wickes contrasts with a recent report from Kingfisher, the parent company of B&Q and Screwfix. Kingfisher noted that while bathroom sales had been weaker, customers were prioritizing kitchen renovations. Kingfisher CEO Thierry Garnier observed a European-wide trend of increased spending on kitchens, deeming them a more central part of home life.
AJ Bell investment director Russ Mould commented on Wickes' performance, highlighting the dip in like-for-like revenue for the design and installation division. "This is no great shock given the pressure on household finances and Wickes will hope this is spending which might return if or when the backdrop improves," Mould noted, suggesting that the deferred spending on kitchens might return when economic conditions stabilize.