Matalan pays the price for a mediocre online offer, says GlobalData

Following today’s release of Matalan figures for Q3 FY2020/21 and Christmas;

Emily Salter, Retail Analyst at GlobalData, a leading data and analytics company, comments:

“Despite significant growth in its online sales in the lead-up to Christmas, Matalan’s online proposition has not been strong enough to boost its total revenue, which fell by £66.9m to £244.8m. With non-essential store closures across much of the UK in November, revenue losses in the 13 weeks to the 28th November accelerated versus Q2 (-11.6%), but impressively full price sales rose versus last year in September and October, despite tightened COVID-19 social restrictions, as Matalan’s proposition as a value retailer and large, spacious locations heavily based in retail parks provided it some protection.

“Arguably Matalan should have performed better than it has so far throughout FY2020/21, with total sales falling 34.1% in the 39 weeks to 28 November, due to its accessible prices and presence of more resilient product categories, notably homewares and childrenswear. Matalan needs to ensure it uses engaging social media posts to position itself at the front of shoppers’ minds for these items in order to benefit from an increased focus on value due to the inevitable rise in financial uncertainty and unemployment over the next few months, otherwise it risks losing out to competitors such as Dunelm and Next, which also benefit from better online offerings.

“Despite enhancements to its digital division and strong online growth in the five weeks ending 2nd January, Matalan is suffering for being a digital laggard. In order to increase its online penetration and protect sales during the ongoing COVID-19 crisis and beyond as sales continue to shift online, the retailer must invest in its proposition to introduce missing basics. For instance, Matalan does not offer an express home delivery service, standard delivery is only free on orders over £50, and it has no third-party pickup options. A delivery saver scheme would also help drive shopper loyalty, especially for family shoppers making more frequent purchases across product categories.”

More Media