As a regular Wilko customer who has long been a fan of its no-nonsense approach and who has appreciated its significant presence in my fairly small town, this news troubles me:
Of course, I am concerned about a loss of a facility.
And I am concerned about the loss of jobs.
But I am also concerned as to why this has happened. I doubt Wilko has been much troubled by the web, even though I know it has itself got a website. Instead, I suspect Wilko is being brought down in the collapse in discretionary spending power amongst those on lower incomes in the Uk who are its main customers. This is what worries me the most. What are we doing to people, all in the name of false economic policy?
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Agreed.
We are a society of sacrificial lambs, sacrificed on the altar of preserving economic lies. It’s like the early 80’s all over again but this time there is no excuse.
But just like BREXIT is shaping up (the other disaster not openly acknowledged), neoliberalism/monetarism was just quietly abandoned by Thatcher as it saw the destruction of the inner cities and industry but there was no proper review of destructive policy, no healing, no lessons learnt, no accountability, no sanction of power and therefore its economic myths have managed to live on to today.
The opportunities for Labour to poke holes in neo-lib orthodoxy are huge but unrealised. Such a shame.
As thousands of small and not so small businesses cease trading I am sure that at some point the defenders of the current economic status quo will offer a defence that it is all to do with Free Markets and will claim that there is no alternative, but what exactly is a Free Market?
In the early days of Neo-Liberalism the terms Free Market and Competitive Markets used to be used almost interchangeably or used together for emphasis but tellingly, Competitive Markets seems to have been eased out of the equation. Hardly, surprising in a world where for decades the tendency has been towards the domination of Monopolies and Cartels.
So once again, what is a Free Market?
Markets without Laws?
Markets only with laws agreed by the market participants and policed only by ineffectual regulators?
A meaningless term used by the beneficiaries of a corrupt and inefficient system to make it sound as if there is some justifiable logic to their behaviour and they are not just a bunch of crooks?
The reality is that they know there is no such thing
All markets have a price attached, some much more than others.
“but what exactly is a Free Market?”
My understanding is that this is a very misleading meme. Marketers point to the “invisible hand” that miraculously makes sure that the economy works “efficiently” and for the best of society. “Free” means free to trade as a company deems fit, claiming that it benefits everyone, and all “red tape” is bad. But all this is value-free.
“Free” really means being free to flout regulations, the ability to dump sewerage into rivers, being able to forego paying a company’s fair share of taxes, to ignore health a safety regulations, etc etc. This is good for companies (and the people who profit from them), bad for people.
well put by Ian Tresman
I am a big fan of Wilko too. As a regular Wilko customer for my work (it’s just a few doors down from me), the shop in my town (Bury St Edmunds) is large and not very busy, and I have always feared that it would close. With this news my concerns are realised.
I hope it can be turned around.
In Ely it is almost always busy
…busy in Worthing, too. Much appreciated and will be sorely missed if it goes.
Despite being what some would see as a middle class Guardian reader, I really like and use Wilko. For many smaller towns, Wilko filled the gap in the high street left after the sad demise of Woolworths. Clearly there’s a need for precisely this kind of shop, both as a service to its many different customers, and to keep our town centres alive and vibrant. As with the fall of “wonderful Woolies”, the collapse of Wilko does not bode well for the ordinary person on the street or, for that matter, the street itself.
I reckon much more useful than Woolworth’s….
But your comment is relevant.
The Woolworth’s site here is now a tattoo parlour
I remenber woolwoths in the 60’s. I bought my first woodworking tool, a tenon saw, there and after several sharpning’s I still use it. It was good then.
🙂
I have some tolls I bought in the 70s still, including my favourite soldering iron. Yes, I have such a thing.
If people don’t have money to spend, local businesses will close. I bet this cost to the country does not appear in any inflation figures.
Ian
You will not hear that in the media and from ‘retail experts’.
Instead you will hear that Wilko got it wrong with high street stores (high rents and business taxes), too big a product range, not a good enough offer to shoppers or that their business model was all wrong blah blah.
This is what Thatcher did in her race to monetarism – when British firms saw their bridging loans (part of their business cycle to deal with cash flow go up with base interest rises) they were blamed for having such loans in the first place as they went out of business.
The Tory Neo-liberals and the their MSM lackeys who for so long depicted themselves as ‘pro-business’ are very quick to blame business for their frankly shit economic policies. Since Thatcherism, the businesses themselves are just collateral damage in their and their funder’s war on labour/working people.
And the fact that the owning family has helped themselves to I think £3 million in dividends is very often not mentioned at all.
They say that the first casualty in war is the truth.
Yes – capital is making war on society – again.
See it.
Believe it.
Wilko, like Woolworths before it, seems to be one of those “nice to have, but rarely buy anything” shops.
When shopping meant visiting butchers, grocers etc.. in small towns one by one, the opportunity to do it all under one roof at the new supermarket with free car parking was too much temptation for modern human nature.
I have mentioned before that this happens to a lot of businesses and services, the shock of closure/ceasing of service, faux outrage in the media, rarely, if ever, pinpointing the real reasons for closure.
I believe Poundstretcher could be next.
I use Wilko quite a lot. So do many others as far as I can see.
I too was a regular customer of Wilco. However over the past year or so, many of the shelves have been half empty or even bare. When I ask staff when they will bet X or Y back in stock, they say they have no idea as they never know what will be delivered. Whether this is a logistics problem, or cashflow problem or some other problem, it has meant that I shop far less there these days, purely because it is so hit and miss with what is available to buy.
Which is a big shame as I would happily patronise Wilco otherwise.
The bare shelves are probably at least in part due to suppliers being unable to obtain insurance against Wilko failing to pay them. This is an example of short termism and excessive risk aversion – prevalent throughout financial capitalist culture. This results in a positive feedback death loop for many businesses that experience what might otherwise be transient difficulties resulting from temporary shocks. In aggregate, this contributes to the increasing fragility of our economy.
This is not an “unfortunate side effect” of current monetary policy – it is the key feature. We hear Andrew Bailey wibble on about what the BoE is doing in the TV studio but he should do it at the meeting where the redundancies are announced.
Higher interest costs will have a direct impact on Wilco’s costs as well as on the spending power of its customers. This how interest rate policy works!
Precisely
Why is it that when Andrew Bailey makes rate-washing comments like this: “I would certainly not wish to talk this up into a crisis in the housing market, because there is plenty of evidence that suggests this is a process that has some moderating influences in it as well”; no BBC, or any journalist simply reply that “as well” is a by-product, not the policy intent. The policy intent is to produce negative real effects for those with mortgages; serious, and for some – perhaps many – a personal crisis. Challenge him to deny it; and then deny that he is now doing politics. The politicians have thrown in the government towel: Sunak and Stormer; the ‘not me Guv’ leaders of Britain.
The PM is on holiday (appropriately in Disneyland). Bailey is now running the country.
Sorry … Sunk and Stormer (aren’t they the comedians who do the Santander advert?)
I think the Fosters ad may be the one you mean, where they advocate misnaming an “average” product.
If, as at least some of us seem to be told, the rises in bank rates are to “take surplus money out of the economy”, might this, in reality, not be the case?
Bank rates may well have other uses but might they be transferring money in the economy and not extracting it?
Might bank rate rises be transferring money from the thinner wallets/purses to the fatter purses/wallets?
In contrast, might taxation move money from the private purse/wallet to the public purse and so, potentially, have societal benefits?
Might a basic consequence and/or purpose of bank rate rises be to transfer money from less wealthy debtors to wealthier creditors?
You may be right
@steve: rises in bank rates are to “take surplus money out of the economy”
I think we must be careful not to overgeneralise. There might be surplus money in the economy overall, but it is currently with the well-off who can afford to save it, which means that the money is not working for most people (ie. the economy in general). For the rest of us, we have less money than a decade ago which is why it is hurting many people so much.
The Equality Trust points out that although “The UK became a much more equal nation during the post-war years” .. “Since 1979 this process of narrowing inequality has reversed sharply.” See: https://equalitytrust.org.uk/how-has-inequality-changed
Thus we move further from democracy into oligarchy and, thereafter, the inevitable collapse. A new Dark Age approaches. It’s far too late to stop it now.
Let’s see.
Massive increases in:
Mortgage repayments
Rent
Gas and electricity
Water
Broadband
Food prices
Travel costs
Stealth taxes
Tories blame inflation on workers and their supposedly high wage demands so their answer is below inflation pay increases.
CPI is their measure. Real world inflation in everything we need is a lot higher.
You are right, discretionary spending is what gets cutback. How can it not be?
Tories and BoE are to blame. They are fighting old battles. They say we are all in it together. Clearly not. Most people live in the real world. The Tories and their ilk don’t.
As the saying goes, it’s not rocket science.
Currently there are at least 4 measures of inflation bandied about.
First there is RPI that used to be the official measure and which takes into account some housing costs. It is approximately 20-30% higher than CPI. When the City of London receives any payment from the government that are linked to the rate of inflation they insist that the Government uses RPI.
Currently, UK inflation for the rest of us is measure by CPI which includes few housing costs and CPIH which has some housing costs included but is never as high as RPI. Make up your own mind about the honesty of a measurement that does not include all housing costs, one of the most important sources of inflation.
The new kid on the block is “core inflation” which believers in the City of London claim is important.
A vital important measure of inflation never mentioned is inflation by social class that tell us that inflation is always higher the poorer you are.
A statistic I like is that the average cost of a house over the last 70 years, which if it had just gone up by the official rate of inflation over that time, would now be worth £64,000.
Makes you wonder if all inflation figures are as rigged as the rest of the economy.
Here, I see something similar but different… where you see massive increases in ‘Mortgage repayments
Rent’
I see the withdrawal of access to shelter
‘Gas and electricity’
less access to heat, light, power in general
‘Water’
less access to water
‘Broadband’
less access to communication
‘Food prices’
less access to nutrition
‘Travel costs’
less ability to travel, and I’m sure this will be greatly expanded whether by bizarre road schemes or edicts limiting flights etc due to their alleged effects on global warming
Stealth taxes
less access to purchasing power, critical in an environment where you have to have money to buy what you need to live.
All these points could be expanded on and added to (dentistry? Health?) but what they add up to is that life support is increasingly difficult to access for more and more people. Difficult, if not impossible, to think this is all by accident and not malevolent design. We’re in a war here, one which isn’t recognised and so is already lost, I’d say.
I am afraid the rocket science is very easy you throw somthing as fast as possible and you move forward. Now the dificualt part is the engineering, you do not want it to blowup.
My local Wilko is situated in a shopping mall in which about 1/3 of the shops are already boarded up.
I got this in an email from Organise this morning – I cannot vouch for it, just putting it out
“Despite the company’s problems, the owners of Wilko, led by the Wilkinson family, took £3m in dividends in the 12 months to the end of February 2022. Now the retailer is on brink of collapse with 12,000 jobs at risk.”
I`m actually going to Wilko this afternoon. Hope thay`ve got some fatballs and bird peanuts. Good for bike spares too.
I have, I admit, heard that the family have been quite greedy for dividends in recent years
Getting it while it’s still there to get, I’d think.
As much as I would like to say that this is another example of corporate greed, are excessive dividends the key determining factor in Wilko’s downfall? £3m in 2022 was only 0.24% of turnover and 1.6% of the wages bill (£188m). Is this an excessive amount?
In 2021 no dividend was paid at all and, in the years going back to 2018, the dividend ranged from £1.5m to £3.5m. Are these amounts evidence of greed? I don’t know. Most of the latest dividend was paid during the tax year ending in February 2022, with the remainder, £750,000, paid in that month.
It’s true that this was a business that was already in decline. Wilko had seen its turnover fall from its most recent peak of £1.619m in 2018 to £1.241m in the year to February 2022, the latest available accounts. From 2020 to 2021, turnover fell by over 10%, i.e. £145m. I wonder what happened in that year.
What seems to be the case is that this is a company that’s been hit with a perfect storm of problems. Perhaps its management team did not have the skills to be able to respond to Covid, either during the pandemic or after, changing shopping habits (exacerbated by Covid) – footfall in its high street stores is down by over 30% compared to pre-pandemic levels, in its retail park sites it’s down by over 19% – Brexit, supply chain issues (the closure of the Suez Canal, port congestions, lockdowns in countries it sources from, demand outstripping supply in the freight market), energy cost inflation, general price inflation and so on.
In November 2022 Wilko sold its distribution centre in Worksop in a sale and leaseback deal, realising £48m gross, part of which paid off and cancelled its revolving credit facility of £25m. So it looks as if it was trying to address its problems, but clearly it has not been able to do enough.
They haemorrhaged cash on the last accounts….
That was what looked ugly and no attempt at creative accounting n pensions etc covered that.
We’ve been on the brink of a collapse of this sort in the not to distant past. Now there are people who have to have multiple jobs just to survive. On top of that they might have to loose their broadband and mobile phones. And so a significant portion of the population will have no time to think or do anything other than work, and they won’t be able blog, post or tweet about their situation. A perfect scenario if you are a Tory hoping to preside over workhouse Britain.
A child at school could forecast what will happen if the government and the Bank of England pursues present policies . High interest rates, falling wages, huge corporate profits . A recession is inevitable. Perhaps something worse . Every day there are reports of business closures or multiples closing outlets. Most of the closures are businesses that cater for the lower end of the income scale. Every now and then I see reports that the world price of oil and gas is falling. Yet this week every filling station in my locality has increased the price on petrol by 6 or 7 pence a litre. What the hell is the truth?
The Russians and Saudies have reduced output and oil has risen $5 a barrel on the market.
Standard rules, oil price rises, fuel is priced at current value, replacement cost, when the oil price goes down, very slow to change.
Likewise, my local stations have raised pump price by 5p a litre.
OT, does anyone know why 5 AGR stations are off line, 4 being refuelled, seems like every month when the usual refuel is 3 yearly.
Know the AGRs have carbon block cracking inspections, all will be closed by 2028, starting 2026.
That’s 4GW of installed capacity lost, what will replace that output
The variations in the UK gas futures market also make very interesting reading.
Falling back from $500 per therm at the start of the Russian invasion of Ukraine it had fallen back to $55 per therm by spring 2023.
Given that over this period most Russian gas had found its way back into world markets via new customers, China for example, you might have expected that the price would have fallen back to its pre-invasion level or at least stabilised, perhaps near $55 per therm.
However, what has happened instead is that the price regularly fluctuates between $55 and $90. Apart from artificial market operations undertaken to sustain these profit gouging higher prices it is very hard to find anything else going on in the world that accounts for them.
I’m another Wilko shopper, it is one of the few places in town where you can actually buy useful things. But my trip this week encountered empty shelves for one of my intended purchases, that isn’t the way to maintain customer loyalty.
Some years ago it moved from its previous rather cramped (and always busy) site on the main shopping street to a bigger site in a new precinct a bit of a walk away. My guess is that they were given a sweetener rent deal for the first few years by the developers and now need to pay full whack; if that has been happening generally it will impact viability.
But as you and others point out above, government/BoE actions are going to tend to put most pressure on businesses that don’t have flexibility in their operating costs, regardless of how good or useful they are. The people who make those decisions don’t care about the quality of life for ordinary people like us. I am going to end up in the absurd position of having to take the car to a retail park to buy a new inner tube for my bicycle (the item I could find a couple of days ago).
I admit, we still have a better, independent cycle shop in town so they never won that business from me.
Had an exchange on social media after I noted the Wilkinsons were Tory/Brexit etc,a Brexiteer blamed it on the involvement of private equity. One way or another, greed, complacency and gaslighting with considerable hubris appears to be doing the country in (and has since 1980).
https://www.theguardian.com/business/2023/aug/04/what-went-wrong-at-wilko
Thanks