Topps Tiles flags margin pressure as new lockdown begins

Topps Tiles’ retail like-for-like sales climbed 19.9% in the period to December 26, compared to a 5.4% decline in the previous comparable period.

However, changes to store operations during the new lockdown which begins today are expected to take a toll.

The retailer said that under lockdown rules, it has been advised to close its tile aisles in stores to prevent browsing. Customers can purchase at the trade counter or online.

Topps Tiles said: “We expect to see an impact on sales during the period of tighter restrictions and trading margins will come under some pressure due to the additional delivery costs associated with higher levels of online sales.”

Commercial customers “are seeing a more protracted recovery from the impact of Covid-19” compared to home DIY shoppers but the retailer expects to make progress at its commercial division this year.

Chief executive Rob Parker said: “I am encouraged by our performance over the first quarter, with our retail business performing very strongly and our commercial business on track with our plans.      

“While the latest lockdown restrictions will impact sales, at this stage it is very difficult to estimate the level of impact or how long this may last. The business remains well funded, is debt-free, has a market-leading offer and a clear strategic focus. The combination of these factors gives me confidence that Topps is well-positioned for growth as we emerge from the restrictions of the pandemic and the economy recovers.”