Following today’s release of The Works’ figures for the 26 weeks ending 30 October 2022 and the 11 weeks ending 15 January 2023; Zoe Mills, lead retail analyst at GlobalData, a leading data and analytics company, offers her view: “Hobbies established during the pandemic, including reading and crafts, remained popular past times in 2022, supporting The Works’ performance over the first half of its financial year and into the festive season. Life-for-like sales grew by 5.7% over the 11 weeks ending 15 January 2023, indicative of the appeal the value retailer was able to garner as many looked to trade down in books, stationery and toys over the Christmas period. The likes of B&M remain a threat, with the discounter reporting a slightly better festive result (like-for-likes sales were up 6.4% in the UK for the 13 weeks ending 24 December 2022). While this was supported by its food offer, B&M does have a wide range of general merchandise.
“As we have seen across several UK retailers this festive season, offline was a key area of growth for The Works, while online dampened its performance. Online sales declined by 14.0% over the festive period, while store like-for-likes rose 9.7%. This is because not only have consumers returned to stores post pandemic but strikes held by Royal Mail in December left consumers unconfident about on-time delivery. The Works reported that store sales were strong in the week before Christmas, and we believe this is indicative of a sustained spending spree by consumers in 2022 as shoppers started and finished their Christmas shopping earlier and later respectively. This was coupled with last-minute impulse purchases as shoppers wished to treat friends and families more this festive season compared with last.
“As we enter 2023, store sales have maintained momentum for The Works, supported by strong January markdowns. However, as the value retailer entered the January sales period with greater stock levels, predominately because of supply-chain delays late last year, the retailer’s bottom line will suffer unless the retailer is able to sustain sales volumes during non-discount periods in 2023. The Works’ share price fell by almost 20% in early morning trading. A focus on front-list book titles will be crucial to this and these books should be placed front and centre of stores to encourage footfall.”
