The struggles of Wilko as they fell into administration are another example of the difficulties faced by companies that are liked by many people but loved by few, which has made them the canary in the mine for the overall health of the retail market.
Wilko, formerly Wilkinson’s, entered administration in early August, with 12,500 jobs and 400 stores at risk of closure if a buyer cannot be found after talks to secure emergency investment failed.
Initially launched as a tool shop in Leicester, Wilko has become a common fixture on UK high streets, becoming known as the place you go for general homeware, garden and DIY products at relatively low prices.
It is very similar to former high street giant Woolworths in that respect, with the comparison intensified by Wilko moving into several former stores and adopting the popular pick ‘n’ mix aisle that it had become known for.
It also has the same issue that ended up sinking Woolworths, as well as causing financial issues for companies such as Game and HMV, which is that they were stores that were generally liked by consumers but not loved, an increasingly common issue in the wake of online retail.
At present, the shops with the best chance of survival are those that are so huge that they can effectively weather any financial issues outside of a massive scandal, and stores that are either so small that they rely on a small relatively robust consumer base or have the flexibility to adapt.
Woolworths was famously a “jack-of-all-trades”, having small footholds in a lot of different market sectors but outside of pick ‘n’ mix was not a market leader in any of them.
Wilko faced the same issue, as customers either turn to cheaper online retail establishments or go to dedicated DIY stores where they can not only buy what they need but get expert advice or see certain products in situ that may not be possible in the relatively smaller Wilko footprint even with careful shop maintenance.
HMV and Game did ultimately survive under new ownership, store closures and a more flexible product range, but whether this option is available to Wilko remains to be seen.