As Kent’s Wilko stores shut up shop, business expert Professor Richard Scase explores the long-term impact of the retailer’s demise – and why the county’s 14 branches have been snubbed by rescue deals.

Wilko will disappear from Kent high streets over the coming weeks, with the loss of thousands of jobs – despite repeated rescue attempts.

And while stores elsewhere in the country have been saved by the owner of Poundland, branches in the county have been snubbed.

Budget retailer Pepco is set to acquire the leases of 71 Wilko outlets, but at the time of writing, none of these include Kent’s 14 stores – all of which are set to close by October.

We can only speculate on the reasons. Is it because the proposed buyer of the stores feel they already have a sufficient presence in the county’s towns? Did Wilko’s stores generate low or zero profits in Kent? Is it because of an opinion the budget retail sector in Kent is already excessively competitive? Or even that the logistic supply problems are too challenging because of Wilko’s town centre locations, as well as the more complex transport issues in the county as a whole that create high operating costs?

What went wrong with Wilko and how will these closures affect the future of our county’s urban streetscapes?

The company was founded almost 100 years ago in 1930 and at the close of the 20th century it was the nation’s fastest growing retail chain, while one of the UK’s leading brands, Woolworths, collapsed.

It acquired great customer loyalty with its wide range of products, from garden tools to toothpaste, tableware, and home DIY products. Its appeal was that it offered these everyday items, that every household would need, but at cheaper prices than other retail outlets.

Until the early years of this century, there was less competition in this value/ budget-end of the consumer retail market. There was Poundland and one or two others but Wilko was the market leader with its dominant brand and customer affinity. Profit margins were good and so inevitably, competition increased, and there were new entrants into the market. Poundland, B&M and the The Range expanded at such a rate that today they have overtaken Wilko in their sales.

A major problem for Wilko is that it had too many stores in too many of the wrong places. They were primarily located in city centres and high streets. It made them great destinations for householders without cars but even so, they were poorly located for a wide range of the company’s bulky goods. Customers were reluctant to carry home tins of paint, glassware and garden products.

These locations also incurred higher operating costs through business rates and rental charges. Wilko’s major competitors chose a different location strategy. They positioned themselves in out/edge-of-town retail parks where rates and rental charges were cheaper. But also places that were more convenient for their customers. The more affluent car-owning householders could park directly outside stores and load their purchases.

Wilko’s problems were made worse by Covid and the second lockdown. This led to a major reduction in the amount of footfall in the high street that affected all retailers. But it also provided an opportunity for shoppers to realise that a similar range of products was available from other competitors. These were in more convenient locations and at cheaper prices because of their lower out-of-town operating costs. These acted to the advantage of companies such as B&M and The Range.

The story of Wilko in its rise and fall is an indication of the changing nature of our high streets and town centres. They will continue to evolve from locations that are dominated by retailers of household goods, a process that is already well underway.

They will become centres for the sale of personal services, ranging from beauty and hairdressing salons, restaurants, and coffee shops, to retailers that cater for personal ‘niche’ tastes of one kind or another that consumers want in relation to their lifestyles and habits.

In this changing landscape, the future is bright for small businesses and independent traders. If - and only if - other preconditions are in place. This means a more realistic approach by government and councils to business rates. That property landlords set rental and leasing charges that reflect present-day high street trading realities rather than those of the golden past.

It also demands that local councils offer transport and parking strategies that are strong incentives to attract consumers into our city centres.

Without these strategies in place, our high streets will continue with their journeys of decline. Perhaps they may even be forced to becoming more residential, destroying the hubs of many peoples’ lifestyles.

Professor Richard Scase is an Emeritus Professor at the University of Kent. He has written many books and articles on business strategies and lectured widely at business and professional conferences across the world.