Online channel props up mediocre year for Matalan, and will protect it in FY2020/21

Following today’s release of Matalan FY figures for 2019/20, Sofie Willmott, Lead Retail Analyst at GlobalData, a leading data and analytics company, comments:

“Despite an impressive first half, with Q1 and Q2 sales rising 2.9% and 11.3% respectively on the prior year, Matalan’s growth slowed from September 2019 onwards with the value-focused retailer only just delivering positive results (when comparing 52 weeks on last year) highlighting that the UK retail market was tough even before COVID-19 hit. Matalan’s strong online performance in FY2019/20 helped it gear up for a greater reliance on this channel during the pandemic and although its digital proposition does not yet match up to some of its more established competitors, having a decent online offer will have enabled it to steal spend from Primark during the lockdown period.

“Matalan had a head start on other clothing players with more time to adjust to the ‘new normal’ and try out safety measures as well as gauge shopper demand, as its stores could open a month earlier than most non-essential retailers due to its homewares offer. Although initial footfall was subdued due to safety concerns and other retailers being shut, the earlier opening will have allowed it to capture spend from those unwilling to shop online and also gave Matalan an additional four weeks to sell through summer store stock.

“Matalan is well positioned to cope with the aftermath of COVID-19. Its out of town locations will be more appealing to those concerned about being able to social distance in potentially busier and less spacious high streets and shopping centres, with larger branches and easily accessible parking making the shopping experience easier. Additionally, as many UK shoppers trade down amidst worries about personal finances and job security, its value focussed product range will be attractive.”

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