Today marked a tale of two discounters. While B&M posted soaring sales, Wilko is struggling. 

B&M European Value Retail this morning posted double-digit growth in the quarter leading to Christmas, with group revenues up 12.3% to £1.57bn.

Meanwhile, Wilko is celebrating after agreeing a £40m two-year revolving credit facility with Homebase owner Hilco UK. It is needed to ensure Wilko won’t run out of money if trading worsens significantly this year.

Wilko’s recently filed full-year accounts at Companies House revealed it fell to a £36.8m loss before tax in the 12 months to 29 January 2022, down from a profit of £4.4m the previous year. Total sales were down £43.2m to £1.32bn and like-for-likes dipped by 3.1%.

The accounts warned the extra financing could be needed on top of £48m already secured from the sale and leaseback of its Worksop distribution centre to DHL in November.

The contrasting figures and fortunes are no coincidence: the success of B&M offers part of the explanation for the struggles of Wilko. In a crowded and fiercely competitive variety discounter market, more shoppers are favouring B&M. But why?


A huge and troubling part of Wilko’s malaise is the make-up of its estate, which is largely in high streets and shopping centres. The accounts pointed to footfall in those locations being down by as much as 30% on pre-Covid levels. Its retail park stores fared better, with footfall down 19% across the same period.

In stark contrast, the 701 B&M UK stores are “mostly located in out-of-town retail parks, making them somewhat insulated from the structural footfall decline in town centres and secondary malls”, wrote the retailer’s former CEO, Simon Arora, in its 2022 annual report.

Wilko earmarked 15 stores for closure at the start of last year, 13 of which had shut by November. They were among 70 stores where profitability could be improved through better property deals or improved sales, the accounts said.

Ongoing re-gearing of leases is part of Wilko’s turnaround strategy – but it needs to do less re-gearing, and more closing of legacy stores and revolving its estate. Without footfall, the improved sales will not materialise.


Sourcing is the backbone of B&M’s success. Before buying B&M as a loss-making and relatively little-known retail chain in 2004, Simon Arora and his younger brother Bobby had already built an import businesses sourcing soft furnishings from Asia.

Over the years, B&M has strengthened those international ties while also building strong relations with leading household brands, to the point some have developed sub-brands specifically for the discounter sector.

“B&M’s sourcing model and its flexibility provides a strong point of differentiation,” said B&M in its trading update this morning. “The supply chains across the three businesses executed well in the quarter.”

Sourcing is another area in which Wilko has suffered, blaming its poor performance in 2021 partly on “severe and widespread disruption to supply chains globally” as it struggled to mitigate the impact of the Suez Canal blockage by a container ship in March.

In contrast, “the B&M business model of directly sourcing a limited assortment within each product range proved highly resilient to the global supply chain disruption” in the 12 months to the end of March 2022, according to its annual report.

If comments on social media are anything to go by, sourcing continues to be a headache for Wilko.

“I went in a couple of stores over Christmas and the levels of stock were so low they didn’t have what I needed,” wrote one retail professional on LinkedIn this week. “It felt like they were closing down and has done for the last year.”

Proposition and value

Insight into perhaps the most worrying of Wilko’s problems came yesterday from its workers, or at the least the union that represents many of them.

Wilko had just announced its new funding, along with the appointment of Chris Howell as chair and non-executive director in the latest leadership change aimed at helping turn around its fortunes.

Major shareholder Lisa Wilkinson is stepping aside as chair but will remain on the board as family director. It follows the appointment of Mark Jackson, formerly CEO of Bensons for Beds, as Wilko CEO designate in December, replacing incumbent Wilko chief Jerome Saint-Marc.

Union GMB welcomed the changes, saying it was “looking forward to working with new Wilko leadership after chairwoman Lisa Wilkinson stepped down”. But GMB national officer Nadine Houghton also highlighted how the new leadership had its work cut out, in a diagnosis of the retailer’s problems from its members.

“Wilko is in desperate need of new direction,” said Houghton. “For a long time, GMB members at Wilko have made the case the company can be successful if it gets back to doing what it does best.

“To do this, Wilko must be genuinely affordable – a good value retailer for hardworking families with customers understanding what the brand represents.”

In the case of B&M, consumers understand what it represents very well. It is Aldi and Lidl-rivalling value but with more of a focus on big grocery brands. Its vast general merchandise assortment means it is also the Aldi and Lidl of non-food.

Do shoppers have such an understanding of what Wilko is, and what it offers that they can’t get elsewhere? Does Wilko?

Wilko’s turnaround plans include “accelerating its omnichannel offer to turn around the business”. But the biggest problem for new chief Jackson is not a question of where and how Wilko sells, but of what it is and where its proposition sits in the crowded discounter market.