The collapse of Wilko’s sent yet another shockwave down the high street in the wake of countless other well-known retailers shutting up shop in recent years, from Debenhams and McColl’s to Philip Green’s empire.
The problems have been brewing for a while at the troubled family-owned business, as it faced stiff competition from e-commerce retailers on one side and discount outlets on another.
Sales have fallen successively over the last four financial years, and dropped by a fifth to £1.2bn between 2019 and last year, leaving the company £35.9m in the red, according to the accounts filed at Companies House.
Over time Wilko’s value proposition – originally set out by founder James Kemsey Wilkinson in the 1930s as “getting a good deal” for shoppers – had ebbed away.
Today the idea of setting up a shop on the high street that sold such an eclectic range of branded products, from light bulbs, cutlery and plant seeds to shampoo, stationery and sweets, would make little sense.
Increasingly price-conscious shoppers preferred the convenience of buying in bulk at a retail park. More nimble competitors, such as B&M and Home Bargains, were quick to adapt to these changing consumer habits.
“B&M has also moved many of its locations to retail parks which are more convenient for many consumers, especially when they are buying bulky goods,” Charles Allen, retail analyst at Bloomberg Intelligence told the BBC.
The failure of Wilko’s is in many ways a failure of marketing. The business had for many years failed to define what the brand represented and who it was for, and failed to differentiate from its lower-priced or specialist competitors.
“Wilko has been caught in a pincer movement on price and design,” Matt Walton, an analyst at retail research group GlobalData told the Guardian.
“It has been outflanked on price by the likes of B&M, Home Bargains and The Range while it is unable to compete on design with the likes of Dunelm or Ikea.”
“It is all a real shame, as there is an excellent brand in there somewhere, and let’s hope it lives to fight another day,” says Gordon Young, Editor-In-Chief at marketing title The Drum. “But in the meantime, the saga serves as a salutary reminder that although many marketing practices have changed, the principles remain the same. So mind your Ps!”