Travis Perkins finance director Tony Buffin believes Wickes takes a “very different stance” with suppliers compared with rival B&Q.
Buffin claims Wickes’ efforts to pay suppliers on time and adhere to the terms it has with them costs the retailer between £20m and £25m a year, but is “absolutely the right thing to do”.
He said: “We have taken a very different stance with suppliers and take the view they are partners. If you are a good citizen then people want to work with you.”
Buffin’s comments came after The Times reported B&Q threatened suppliers by demanding they pay hundreds of thousands of pounds to stay on its books.
B&Q has responded by saying it is committed to treating suppliers “fairly” and claiming it is engaged in a “transparent scheme where we and suppliers reduce prices for customers in order to drive sales growth”.
Wickes has significantly increased its profits for the full year despite investing in price cuts and promotions, which Buffin attributes to focusing its efforts on key value lines.
Buffin said: “Where previously we had a plethora of relatively modest promotional discounts we have pulled those together into modest, harder hitting promotions on our gondola ends.”
“We have also looked at where we source product from. We have to be lowest-cost in terms of operating cost and buying cost.”
Travis Perkins’ consumer arm, which largely consists of Wickes, reported its adjusted operating profit increased 22.7% to £77m for the year ending December 31.
The consumer arm posted revenue growth of 8.8% to £1.3bn, while like-for-like sales grew 7.3%.
Buffin also attributes Wickes’ success to being the “Aldi and Lidl” of the DIY sector due to its smaller box size and having lower prices due to its strong emphasis on own-brand products.