Decathlon struggles to shift sports gear as ‘cautious’ Brits curb spending
The UK arm of sports gear retailer Decathlon has sunk further into the red, with the firm blaming the ongoing cost of living crisis for a fall in sales.
The retailer, which is part of the wider France-headquartered group, saw its pre-tax loss widen to £12.5m in 2023 – up from a loss of £9.4m in the year before, according to new documents filed to Companies House.
The loss came as the sporting goods giant struggled to shift its stock, with its turnover dropping to £284m during the 12 months from £300m in the year before.
Decathlon UK closed two stores in 2023 and shed more than 160 members of staff.
But despite the challenging financial backdrop, the company continued to invest in revamping its sites, spending £13.6m on store improvements and £7.6m on warehouse automation.
In a statement signed off by the board, Decathlon UK said: “The increased cost of living significantly constrained consumer spending, resulting in a flat performance across the UK global retail sector.
“Many retailers, including ourselves, faced difficulties in achieving satisfactory results. UK consumers faced erosion in disposable income due to inflation and minimal salary increases, prompting greater caution in their purchasing behaviour.
“Consequently, factors such as product pricing and shipping fees became pivotal in driving consumer conversions online.
“Furthermore, this heightened competition led to increased stock levels among retailers, creating a market saturated with discounted products as companies sought to bolster their balance sheets and cash flow.
“This complex and competitive environment ultimately resulted in reduced trading success in our digital channel.”
Decathlon SE performed better than its UK subsidiary, heralding 2023 a “transformative year” for the group.
Its sales for the year rose 1.2 per cent to €15.6bn (£13.6bn) with digital sales accounting for 17.4 per cent of the group’s revenue.