Very Group says that its customers’ spending habits seem to be shifting back to more familiar patterns, a year on from Covid-19 lockdowns that led to higher spending in home working and living categories.
Spending in the first quarter of its financial year rose strongly in fashion and sports (+14.5%) but fell in homewares (-16.7%). The group also points to growing sportswear (+7.3%) and electricals (+5.3%) sales), while sales in its ‘developing’ categories, including toys, gifts, beauty and leisure, were 3.2% ahead.
“Our robust business model which offers a multi-category range has continued to provide resilience against adverse movements in individual products categories as we annualise against a particularly strong Q1 in FY21,” Very Group says in its first-quarter statement. “The Covid-19 pandemic in the UK saw shifts in consumer spending habits with a focus on product categories that support home living and working. As we annualise against this, we are beginning to see a shift back to a more typical basket.”
At the same time, Very Group has reported rising revenues at its flagship Very brand – but a fall in sales at its declining Littlewoods business. The retailer also says it is seeing “continued benefits from the opening of the new [Skygate] fulfilment and returns centre at East Midlands Gateway”, which kept distribution expanses flat at £49.1m – equivalent to 10.1% of revenue, down from 10.5% last time. The automated centre, designed, built and still supported by Knapp opened just as the first Covid-19 lockdown was announced in March 2020 and now processes orders in as little as 30 minutes.
Group sales of £484.1m in the first quarter of its financial year. That’s 3.9% up on the same time last year. The overall growth came as Very.co.uk revenue grew by 9.6% to £403.8m in the 13 weeks to October 2, while Littlewoods revenue fell by 17.7% to £80.3m from £97.6m a year earlier. Retail sales were 3.9% up, including an 8.6% growth in sales at Very.
Top-line pre-tax profits came in at £27.2m, but one-off costs of £13.7m, related to the costs of a £575m bond refinancing, meant that bottom line pre-tax profits were £13.5m. That’s up from £8.6m a year earlier.
As of October 2, the retail group had £133.6m in inventory – compared to £113m on September 26 2020 – as it stocked up for peak trading.
Very.co.uk is a Top50 retailer in RXUK Top500 research, along with Littlewoods.com.
