Topps Tiles is a beneficiary of consumers decorating their homes, with retail like-for-like sales rising 19.6% in the first eight weeks of FY2020/21, boosted by consumers staying home amid the second lockdown. This follows a successful Q4 (July to September) where retail l-f-ls grew 16.5%. The commercial sector has experienced a sluggish recovery compared to retail since the pandemic hit, and the strong end to the year was not enough to offset significant losses in Q3 when stores were closed, leading to a loss before tax of £9.8m.
The tile specialist is wise to focus on offering trend-led, own-brand collections to boost its design credentials and increase consideration. It also plans to promote affordability through its ‘Get The Look For Less’ offer, which will appeal to customers seeking to trade down amid financial uncertainty. This will help Topps compete with competitor B&Q, which recently announced plans to trial concessions in four ASDA superstores. According to GlobalData’s Decorative DIY 2020 report, 29.1% of those that purchased tiles did so at B&Q, compared with 17.8% at Topps Tiles. This gap may broaden as B&Q continues to increase its presence.
Topps, along with other retailers, will have to navigate market uncertainty for some time with the new Covid-19 measures influencing consumers once again. The tile specialist is reducing its reliance on physical retail (it shed a net of 20 stores in FY2019/20) and will need to ensure its online offer can meet increased demand.