Carpetright chief executive Wilf Walsh warned that 2017 was going to be “hard work”, as currency volatility and increased competition continue to rile the retailer.
After unveiling a 1.9% uptick in third-quarter like-for-likes, Walsh told Retail Week he was “feeling confident”, but “not putting on his giddy pants”.
He said it would be “an interesting three to six months” for retailers in the sector, as the challenges of currency and consumer confidence continue to play out.
Consumer sentiment
“The two things that could slow momentum in our sales growth are two things I can’t do anything about. One is consumer confidence and another is the weather over the coming April bank holiday,” Walsh said.
Walsh said that while there was “no evidence” of falling consumer confidence this January, he has “no idea what’s going to happen” in the next few months.
“I would not be surprised if we encounter some issues going forwards. Having said that, we have an interest free credit offer that our competitors can’t match.
“For us, the question is, can we do the very best we can versus the competition to grow market share?” Walsh said.
The latest figures from the GfK consumer confidence index hinted at a potential slowdown in big-ticket purchases such as furniture and carpets.
Price increases
On the hot topic of cost inflation, Walsh said: “Like everyone else, we’ve put prices up, but it’s not on everything and it’s by single-digit percent.
“We’ve soaked up some of the pain and passed a bit on, but given our size and scale we’re able to offer promotions to give people really good value right throughout the store, so we can maintain our market leadership.”
He added that the next round of negotiations starting this May would have to involve suppliers “sharing some of the pain”.
Competition
Walsh said Carpetright has also been “dealing with” increased competition from new players in the market, such as Tapi.
“When a competitor lands on your lawn and challenges you in key locations, you’ve got to respond, and we’ve done that with our refurbishment programme,” Walsh said.
He said that the newly accelerated programme was “tough” – Carpetright is refitting a new store every couple of days – but that the returns have been rapid.
“The sooner we can get the refit work done the better,” he said. “It’s a hard grind day in and day out for everybody, but we plough on.”
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