Wilko says it is focusing on omnichannel and the customer experience at a time when its customers are buying fewer goods in the face of rising inflation.
In Wilko’s latest full-year figures – to January 29 2022 – it reports sales falling by 3.3% in value, and a bottom-line loss following supply chain disruption. Since then sales volumes have continued to fall throughout 2022, while price inflation driven by Russia’s invasion of Ukraine has pushed up the value of sales. The retailer is now reducing costs and controlling spending in the expectation of “significant inflationary operational cost pressures across labour and energy”.
Wilko says it is developing an omnichannel model that takes account of the way customers are now more likely to buy online, and it also has plans to strengthen its customer experience through service improvements.
Wilko this week posts full-year figures showing turnover of £1.24bn in the year to January 29 2022. That’s down by 3.3% from £1.28bn a year earlier. Like-for-like sales – which strip out the effect of store openings and closures – were also down by 3.3%. Top-line earnings before interest, tax and one-off costs came in at £16.6m, down by 67.5% on the £48m reported last time as the effects of the supply chain disruption of a year ago, including the blocking of the Suez Canal, was felt. At the bottom line it reported pre-tax losses of £38.7m, down from pre-tax profits of £5.4m a year earlier.
During the year Wilko put working capital into higher levels of stock in the light of global supply chain issues, invested £25.9m in capital expenditure including stock management systems, and paid out £2.25m in dividends – followed by a dividend of £0.75m in the current financial year. Subsequently, in November 2022, it sold and leased back its Worksop distribution centre for £48m, using £25m to pay off its revolving credit facility and giving it a total of £62.8m in cash. It expects to be able to operate until January 28 2024 without taking on additional debt.
“We continued to invest, as we focus on improving the customer journey and experience to enable our omnichannel aspirations in subsequent years,” its board says in its full-year financial statement. That investment went into TV advertising and into digital channels. “Our focus remains on those categories for which consumers love Wilko, providing solutions to the jobs they have in their homes and gardens, putting the customer and the product at the heart of the business.”
Wilko closed one store during the financial year, taking it to a total of 413. At the time, 350 of its stores were well-placed for its market and/or were profitable. But in 70 locations it wanted to improve store profitability – and had planned to close 15 shops during 2022. Two of those shops remain open following negotiations with landlords.
Privately-owned Wilko is based in Worksop, Nottinghamshire and is controlled by the Wilkinson family.
Wilko says it is on course to reduce its use of plastic packaging by 20% by the end of this year. Between June 2021 and January 2022 it remove more than 1,000 tonnes of single-use plastic packaging from its products, after signing up to the UK Plastics Pact in June 2021. In that year it also launched a recycling scheme for single-use face masks, which were made into boards used by the construction industry to make benches, public furniture and garden planters. It has also launched its own range of plastic-free wipes and reduce its carbon footprint by an estimated 19.2k tonnes.
Wilko is a Top50 retailer in RXUK Top500 research.