Social media ban driving ‘screen-free’ sales, The Works boss says
The boss of discount retailer The Works has said the government’s crackdown on social media usage has driven customers towards the “screen-free activities” offered in his stores.
Gavin Peck, chief executive of the Aim-listed retailer, believes Labour’s incoming social media ban has pushed up demand among parents for analogue activities for their children and was behind his firm’s recent uptick in sales.
The Works has rebranded as the UK’s leading destination for “affordable, screen-free activities for the whole family” in recent months, in an attempt to overturn perceptions of the firm as a “pile it high, sell it cheap” retailer.
Peck said these efforts have coincided with the government’s crackdown on children’s usage of social media. He told Morning Wire: “People are seeing the potential negative impacts of too much screen time.
“Anything that the government brings in heightens that awareness as well, and we certainly hear and see more people talking about that.
“[From] our sales performance, particularly in the last six months, you can see [that] it feels like there’s an increased demand for those activities as well.”
Last month, former Prime Minister Sir Keir Starmer unveiled a social media ban for under-16s which will take effect from January. The government also plans to impose a midnight curfew for 16 and 17-year-olds.
Revenue boost after ditching online shopping
The Work’s decision to focus on screen-free products has helped the retailer to challenge “perceptions of people who have shopped with us in the past,” Peck said.
“About 18 months ago, we put screen-free positioning at the heart of our business. Our comms and campaigns have been much more focused around that, and we’ve seen much higher engagement and stronger sales off the back of it,” he said.
On Thursday, the retailer posted 3.3 per cent sales growth and £260m in revenue, pushing adjusted profit up 44 per cent to £7.2m.
In March, The Works stopped accepting sales through its website with immediate effect, in a bid to focus on its ambitious roll out of more than 100 new stores.
The retailer has never turned a profit through online shopping, which only ever accounted for less than 10 per cent of its sales.
“We’ve got finite resources, time, and money, and it just felt the right thing to do. Shareholders were all very supportive,” Peck said.
The Works eyes TG Jones stores
Following Andy Burnham’s announcement of a business rates cut for pubs and music venues, Peck called on the Prime Minister to commit to wider reform to the tax which benefits all high street firms.
He also demanded “fundamental reform to business rates for retail generally, which has been long talked about but not quite delivered”.
“When you look at the percentage of tax that we pay as a retail industry versus what we contribute to the economy, it’s massively outweighed. And the rates themselves are pinned on antiquated property values,” he said.
Last month, Peck told The Times that The Works hoped to snap up some of the high street sites vacated by TG Jones during its drastic restructuring.
The rescue plan, which was approved by a judge earlier this month, will force the closure of as many as 150 former WH Smith stores.
Peck told Morning Wire that his firm is in early discussions over acquiring a number of former TG Jones sites.
“First of all, it’s sad to see any retailers struggling and closing stores. We want vibrant high streets with more retailers on them. But where there are closures in TG Jones and others, we are seeing some opportunities,” he said.
The Works, which sells toys, games and arts and crafts, was founded in 1981 and operates 508 stores across the UK.
Shares in the Aim-listed firm slipped three per cent on Thursday to 76p.