Covid restrictions have further amplified this market through changes in working habits, resulting in more time spent in the home, fuelling further desire to renovate and refurbish. We have also seen increased appetite from rental tenants to invest in their properties, interest from the millennial generation in DIY, combined with a higher level of savings which supports pent up demand. When taken together these factors continue to indicate strong growth opportunities in the home improvement market.

The appetite to invest in home improvement played out strongly in the first half of 2021 as customers sought to complete projects either through DIY, employing a local tradesman or seeking concept to completion services on projects such as a kitchen or bathroom installation. The Wickes proposition continues to have broad appeal irrespective of how a customer chooses to complete their home improvement project.

Operational progress

Wickes continued to be classed as an 'essential' retailer through Covid restrictions in the first half of the year, with stores remaining partially open until 12 April 2021 and fully open thereafter.

During this period, both our store and distribution environments handled record levels of throughput, driving strong operational leverage in challenging circumstances by continuing to develop and refine working practices whilst delivering improvement in customer satisfaction measures. Investment and innovations in this area included new in-store digital handheld terminal picking capability, 'park and collect' allowing customers to remain in their vehicles when collecting goods from store and continued investment to develop in-store fulfillment space to maximise multi channel capacity. We have also seen an increase in assisted selling as customer proximity and service has returned. Throughout the first half we continued to invest in areas such as cleaning, social distancing and marshalling, to ensure that our operational environments remained safe for colleagues and customers.

Government restrictions required our DIFM showrooms within stores, which showcase our kitchen and bathroom ranges, to remain closed from January 2021 through to 12 April 2021. DIFM activity therefore relied entirely on our newly developed virtual showroom journey which was rolled out in Q4 2020. Our virtual showroom tour saw over 1m interactions within six weeks of launch, delivering a resilient level of sales despite showroom closures through our critical winter sale period.

Despite an industry-wide shortage of installers, we have continued to offer customers the best available lead times in the market and have retained our 'distinction' level of service from the Institute of Customer Service in challenging circumstances. We continue to grow our installer network with over 350 new installation teams approved in the first half of the year, strengthening the capacity and quality of our installation capability. Additionally, we continue to progress our installer apprenticeship programme with the initial cohort completing their training in the first half of the year.

Our store network remained open throughout the first half (which compares to 2020, when our stores remained closed for a number of weeks), and as a result we have seen changes in participation through our customer fulfilment channels. Participation has strengthened in self-serve, whilst click & collect has reduced. Home delivery has maintained high levels of participation following strong growth in 2020, indicating an underlying change in customer behaviour. To support this underlying change we are building out broader partnerships with carriers to service the increase in demand whilst also giving customers the best possible experience.

Availability challenges in certain categories have been widely discussed. Whilst we are not immune to these challenges, we consider our strong supplier relationships, curated range and operational agility have served us well to continue to provide customers with the products they need through this period. This is evidenced by a consistently strong and resilient Core performance through the first half of the year, and we expect to maintain a strong focus on availability to ensure we are best placed to mitigate any impact. We will also maintain a good dialogue with customers to manage expectations where supply shortages or project delays are unavoidable.

Issues on cost price inflation being experienced across the industry have been well-flagged, particularly in key commodity driven areas such as timber. We are managing through these transitory pressures by working closely with our suppliers, adjusting prices where necessary whilst maintaining a competitive price position to provide customers with the best possible value.

Winning for Trade

We have continued to grow our TradePro membership, enrolling over 50,000 new local trade customers, bringing total membership to over 600,000. Our local trade customers indicate that they have a strong pipeline of work and this has translated into increased transactions and spend, supporting our Core performance through the first half.

We continue to evolve our digital capability during the half, with more personalisation introduced in the TradePro app together with the ability to target promotional offers and give early visibility of these offers to drive loyalty. We continue to develop our Mission Motivation Engine, with an initial focus on local trade, to help us identify which missions our customers are on - leading to more relevant personalised communication across all channels. In addition, our new digital picking capability in stores enables prioritisation of the trade customer orders to ensure we can better deliver on the need to 'save me time, save me money.'

Accelerating DIFM

We believe digital development and product innovation will drive the acceleration of growth within DIFM. As such, this remained a core area of focus and investment during the half. Throughout the period the virtual showroom journey and virtual tour functionality have enabled us to continue to engage with customers and take them through the design and sales process entirely remotely, supported by our experienced design consultants.

We have continued to invest in product innovation in line with changing customer demands and needs, including a major refresh of the kitchen range, a completely new bathroom range together with a standalone home office proposition, all of which are indicating encouraging levels of interest from customers. The home office proposition notably demonstrates our agility to respond to changing consumer behaviour and leverages our existing design and installation capability. Our kitchen and bathroom ranges are being progressively introduced into our showroom displays, and will be completed in the second half of the year. We also took our new Bathroom range above the line, launching our first ever bathroom TV ad.

We continue to see high attachment rates of tiling and flooring sales to kitchen and bathroom projects, confirming the opportunity to grow adjacent categories and increase overall project spend. Installation solutions for new categories are progressing well with pilots expected to commence later this year.

Digital development has delivered improved imaging, features and pricing illustrations for DIFM projects, together with new video content supporting flooring and tiling.

DIY Category Wins

Our highly curated range continues to work well, supporting strong levels of Core sales growth and market share improvement through the first half, with extended ranges available through our in-store online terminals (OLI) and through our website.

As part of our strategy to capture market share in underweight categories, range reviews were completed in garden maintenance, flooring, timber & sheet materials and own brand power tools, delivering strong sales growth, improved availability and stockturn with an average 20% in-store SKU range reduction supported by an extended range online. Further range reviews are planned for the second half of the year.

Store Refits/Enhanced store service model

During the first half of the year, three store refits were completed in Dundee, Ruislip and Stockport together with a refresh in Taunton and a relocation in Sunderland. The sales uplifts from these investments continue to deliver strong returns on investment and we expect to accelerate this programme of investment moving into the second half of the year.

We continue to evolve our store service model and have recently re-launched our Dunstable store following a refit, to represent the current best in class store service proposition.

ESG

At the start of the year, we laid out our ESG focus areas together with our ambition to grow a responsible, sustainable business supported by a board level ESG committee.

In the first half of this year we have continued to strengthen our colleague networks. We have grown our LGBT+ allies, delivered disability smart training, extended our mental health first aiders, and seen over 380 managers taking part in our Race, Ethnicity and Identity programme. We also launched a partnership with Peppy Health, supporting our colleagues with menopause and fertility services.

Wickes continues to focus on supporting young people across our communities. We have launched our first to market 'Installer Apprenticeship' scheme, as well as supporting Kick Start. We have now raised over GBP1m for Young Minds, our charity partner, after strong fundraising in the first half of this year. Following a trial of our new Store Community Programme, which supported over 50 charity partners and schools across four regions, this programme is now being extended across our store estate.

(MORE TO FOLLOW) Dow Jones Newswires

September 16, 2021 02:00 ET (06:00 GMT)