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May 26, 2021updated 16 Feb 2022 10:15am

Wilko underperforms other essential retailers during COVID-19

Despite remaining open as an essential retailer, Wilko's 2020 sales growth is disappointing.

By GlobalData Retail

Given Wilko’s status as an essential retailer, which has allowed it to keep stores open during periods of lockdown, its sales growth for the year to the end of January 2021 is disappointing. This is particularly true when compared with other essential value players; B&M grew its sales by 24.0% between April and December 2020, while The Range also reported solid trading during lockdown.

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Wilko has been severely impacted by declining footfall to high streets and shopping centres since the pandemic started, with most of its stores in these locations. Poundl and suffered for the same reason, with Poundl and and Dealz like-for-like revenue growing a modest 2.4% in its Q1 to December 2020. Unlike Poundl and and B&M, Wilko operates a transactional website, and was therefore able to transfer some shoppers online. However, strong growth in sales through wilko.com (+89%) was not enough to offset lost store sales. Wilko’s weak performance in relation to competitors, combined with the fact that its sales have been declining since long before the COVID-19 outbreak (down 5.7% last year and 3.9% in FY2018/19), demonstrates that its proposition does not resonate with shoppers.

Though Wilko reported double-digit growth in high-demand categories such as paint, gardening and decorating, it still likely underperformed other retailers operating in these markets, such as B&Q. Wilko should introduce more trend-led home products to drive appeal and capitalise on ongoing high demand for categories such as homewares. The value retailer is wisely placing increased focus on sustainability, having signed up to the UK Plastic Pact which aims to reduce single-use plastic in products and packaging. Wilko should use its social media channels to raise awareness of any strides it makes in this area to boost appeal among young, eco-conscious shoppers.

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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