Customers’ own brand switch slows sales growth at Victorian Plumbing
Customers switching to own-brand products because of the cost-of-living crisis impacted sales at Victorian Plumbing during the first part of its financial year, according to new figures.
The Skelmersdale-headquartered company said the move has led to a reduction in the average order value year-over-year during the first 21 weeks of its year.
However, the business added that its order volume has increased over the same period, “more than offsetting the reduction”.
Victorian Plumbing added that as a result, it has achieved a revenue growth of 1 per cent during the period.
In a statement issued to the London Stock Exchange, Victorian Plumbing said: “As reported at the FY23 results on 22 November 2023, customers are continuing to seek value and are purchasing proportionately more own brand products, which has led to a 3 per cent reduction in average order value (AOV) year-over-year (YOY).
“In keeping with strategy, and despite an unchanged market backdrop, the group has continued to make market share gains, with YOY order volume up 4 per cent, more than offsetting the reduction in AOV. As a result, we are pleased to report year-to-date revenue growth of 1 per cent.
“The increase in own brand product sales continues to improve the group’s gross margin and, together with stable marketing spend efficiency, enables us to remain confident in delivering full-year adjusted EBITDA in line with market expectations.
“As planned, we are making significant progress towards the opening of our new distribution centre, which will address current capacity constraints, unlock growth potential and create efficiencies.
“One-third of the warehouse fit-out is now complete, with the expectation that we will be fully operational in the second half of 2024, on schedule and within budget.
“We continue to focus on our long-term goals, notably in gaining market share, and we are making good progress across our strategic growth areas.”
Victorian Plumbing is expecting to report its half-year results for the six months ending March 31, 2024, on May 28.