Revenue falls at Lakeland for the first time in over a decade.
Lakeland was hit in 2016 by falling consumer confidence following the vote to leave the European Union. Revenue fell 6.5% to £167.2m as shoppers reined in spend on discretionary home categories such as bakeware.
With a core customer demographic of 45+ AB shoppers, Lakeland’s core competition is from midmarket players with a more premium cooking and baking offer. John Lewis launched the Design Project in 2016 which helped the department store differentiate itself in kitchenware, and Sainsbury’s developed its more premium lines, for example through the ‘Sainsbury’s Collection’ cast iron and copper ranges. Lakeland is also not exempt from the growing threat of general merchandisers such as B&M, The Range and Wilko which are improving their accessibility by growing UK store networks.
While Lakeland has faced growing competition, its branded ranges, which include collaboration with Mary Berry continue to reinforce the retailer’s specialist credentials and destination status in cooking and baking. Lakeland is right to continue expanding internationally – the retailer opened 10 shop-inshops through a partnership with retailer The Good Guys in Australia during the year.
Lakeland’s UK store count remained unchanged in 2016 – the retailer rightfully focussed investment on refitting four stores to drive footfall and increase dwell time. Lakeland must monitor the arrival of Australian cooking and dining specialist House in April 2018 as it prepares to open 75 stores in the UK over the next three years, and should continue investing in multichannel to compete with Amazon.
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