‘Wilko’s demise doesn’t mean the death of the high street’

Such fears have been heightened by the lack of any bidder for Wilko in its entirety. Administrator PwC said it is “therefore likely that there will be redundancies and store closures”. However, at the time of writing, The Times reported that there has been a surprise bid from HMV tycoon Doug Putman, who would take about 200 stores and continue to trade under the Wilko name.

Barring such an outcome, the collapse of Wilko is terrible news for Wilko employees and for towns where the retailer’s presence will be desperately missed. It does not mean, though, that high streets in general are doomed.

For a start, hopes remain high that other retailers will pick up a substantial number of Wilko stores. Between them, B&M and Poundland owner Pepco could take around 150, Sky News first reported, while others such as Tofs are understood to be interested in smaller parcels of Wilko’s 400 branches.

“Wilko declined mainly for reasons particular to itself, such as failing to keep up with competitors. But value retail overall is on the up”

For them, the end of Wilko spells expansion opportunity – high street expansion, helping ensure a vibrant retail proposition for shoppers who might have gone to Wilko.

As has been widely reported, Wilko declined mainly for reasons particular to itself, such as failing to keep up with competitors on key measures such as value for money. But value retail overall is on the up.

According to GlobalData, the UK value, discount, variety stores and general merchandise retail channel will grow by 5% per year to £59.4bn in 2027.

In the past, some people moaned that high streets were being ‘taken over’ by pound shops, but the value specialists should be welcomed in town centres for their contribution to local communities and economies.

In fact, they are stalwarts of the types of locations where Wilko has a presence. According to CACI, 50% of locations where there is a Wilko are also home to a B&M or Home Bargains – and that rises to 60% in certain places such as major town centres.

The lowest level of overlap is in retail parks. Their presence is representative both of the challenges they posed to Wilko and their ability to fill the void left by its departure.

Since the pandemic, stores have generally bounded back strongly. Some of the most successful retailers such as Primark and Greggs – both of which also have strong value credentials – are very much in evidence in town centres. So while some, like Wilko, may disappear, there are others already established and still expanding that can fill the void. 

“While the picture for town centres overall is by no means irrevocably bleak, it is clear that for retail to thrive there the right policy needs to be in place”

The high street void rate stood at 13.9% in the second quarter, according to the BRC-LDC Vacancy Monitor. That was better than shopping centres, where 17.8% of premises lay empty.

The stark message from the data, though, was polarisation by location. The proportion in the Northeast, for instance, was 17.5% compared with 10.8% in Greater London.

While the picture for town centres overall is by no means irrevocably bleak, it is clear that for retail to thrive there or elsewhere the right policy needs to be in place.

From next April, for example, an additional £400m looms for the already high business rate burden – the government should freeze on rates.

Policymakers also need to act on the spiralling problem of retail crime, which as well as being a danger to store staff puts off consumers from visiting areas that develop a reputation for antisocial behaviour.

With business-friendly policies in place, there is surely no reason why many high streets cannot thrive, and retail occupants remain a key part of the mix.

Wilko’s demise does not mean the death of the high street. Putman showed that with his turnaround of HMV.