A SHOPPING expert has revealed why Wilko failed and how a rival budget chain provided the killer blow.
The high street giant filed for a notice of intent to appoint administrators last week – putting all 400 of its stores at risk.
AlamyA shopping expert has revealed why Wilko failed[/caption]
Despite being a shopper-favourite since the first store opened in Leicester in 1930, like many other retailers, Wilko is said to have since seen a big drop in footfall over the last few years.
It comes as customers have been cutting back on spending due to soaring inflation.
High energy costs and a shift towards shopping online after the pandemic have also taken a toll.
And now a consumer behaviour and retail expert has revealed why the store failed – potentially leaving around 12,000 people jobless.
Dr Amna Khan said Wilko has failed to stay relevant as their rivals, like B&M and Home Bargains, are expanding.
She told MailOnline: “When consumers think discount, they think B&M, Home Bargains, or even the middle isle on their Aldi shop.
“One thing about Wilko is there hasn’t been an online push.
“There are many valuables in having in-store products, but there are too many frictions stopping the consumer – while other competitors have made it friction-less.”
Dr Khan added that the cost of living pressures on Brits is also part-responsible.
She said: “[Wilko] struggles with some of the locations it’s in, you have to make a destination shop.
“Other companies such as Poundland are aggressively starting to grow in many different formats.
“With inflationary pressures it’s becoming increasingly difficult for them to manage costs and when you have products that aren’t everyday consumables such as food, consumers can quite easily cut them, they can go without.”
It comes as the ailing retailer has stopped processing online deliveries meaning customers can no longer order items to their homes.
Wilko recently extended its home delivery contract with GXO until June 2026.
But shoppers are now only given the option to use click and collect services when visiting the retailer’s website.
Wilko’s notice of intent essentially means they have a 10-day window to secure a deal while it’s still protected from action by other creditors.
It has until Monday to find new funding to ensure its future.
It was reported yesterday that the retailer was in rescue talks with the firm behind Laura Ashley.
Sources told Sky News that the Gordon Brothers, the owner of Laura Ashley, could offer to fund a major restructuring plan to help save Wilko.
The brand is also in talks with several other buyers but there’s no indication as to whether any formal offer could be on the table.
Gordon Brothers is a specialist in retail restructuring and helped rescue Laura Ashley from the brink of collapse.
The homeware brand was rescued by the firm and still operates in 48 Next stores across the country.
Gordon Brothers has also helped liquidate big brands that previously filed for bankruptcy in the US – including Bed Bath & Beyond and Hollywood Video.
However, there’s no guarantee that the talks between Gordon Brothers and Wilko will result in a deal.
Bosses were said to be exploring the sale of a controlling stake in the company just last month.
The retailer is being advised by PwC, and property agents CBRE have been brought on board to negotiate with landlords.
If Wilko does file for administration, all control of the business is passed to an appointed administrator.
So far, chain bosses haven’t revealed what will happen to all 400 shops and staff.
All sites will continue to operate as normal for now, and even if administrators are brought in, the stores could still keep going if the company is bought by someone else.
It comes as the company announced plans to close over a dozen of its shops in January last year.
Then in February 2023, it revealed it planned to cut over 400 jobs, including both store and head office roles.
And in May, the discount chain was looking at restructuring options and approached financial advisers.
It was said to be considering entering a company voluntary arrangement (CVA) which is a form of insolvency.
Wilko, like many other high street retailers, is said to have seen a big drop in footfall and has “stopped performing to its full potential”.