The Range warns of ‘severe but plausible downside’ as sales slip

The value variety chain reported a 10.6% fall in sales compared to the prior year in the 52 weeks to January 29, 2023.

However, sales were still up 26% on pre-pandemic levels and up 17.3% on a like-for-like basis, which the group said represented a “return to a more stable period of trading” from heightened demand during the pandemic.

The Range said it is now faced with “wider economic uncertainty and potential downturn” that has affected the cost of goods from suppliers, but its position as a value retailer means it is in a “resilient position”.

It forecasts that in the trading period to August 2024, there will be a reduction in sales to “adjust for the impact of new store openings” but that it is still expected to generate “significant cashflows”.

Gross profit margin also fell, driven by higher costs of goods purchased, associated freight costs and further price discounting in-store and online.

The retailer’s operating profit is a “significant reduction” on the prior year, reflecting operational challenges within the business.

Chief executive Alex Simpkin said: “The FY23 results are reflective of a period that ended nine months ago and, during which, significant operational challenges arose for many in the retail sector, primarily related to the fallout from Covid and the Ukrainian conflict.

“Since the period ended, The Range has invested in constructing a new 1.2 million sq ft distribution centre in Stowmarket, with completion taking place on November 6, 2023. This will provide the business with a best-in-class facility to service its distribution and capacity requirements and meet its ambitious expansion plans.

“In September this year, The Range acquired the Wilko brand and digital trading team, allowing the much-loved family brand to continue to deliver value and quality for the UK consumer. We were excited to have relaunched Wilko.com just four weeks post-acquisition. 

“The Wilko proposition has also been launched inside all UK Range stores and in early November the group announced the reintroduction of three standalone Wilko high street stores in Exeter, Plymouth and Luton. We are looking forward to opening further standalone Wilko stores during 2024.  

“This year to date, we have opened four new stores with a further four due to open before the period ends; with six stores having the full Iceland food implementation. The business continues to seek opportunities to expand its growing store portfolio and has ambitions to open 20-25 new stores next year, subject to availability. 

“The group is in a strong position to deliver on its ambitious growth plans and we head into our Christmas period with an exciting range that we know that our valued customers will love.”