Topps Tiles has reported a 9.7% year-on-year drop in like-for-like sales for the third quarter, suggesting a slight improvement in "challenging" market conditions.
The sales figure for the three months to June 29 was slightly lower than the 9.2% decline seen in the first half of the company's financial year, but it said sales "stabilised" through the quarter. "Market conditions have remained challenging overall, with subdued demand in the domestic repair, maintenance and improvement sector, especially for bigger ticket projects," it said in a trading update.
The company has seen trading ease back since enjoying record sales in its previous financial year as customers have tightened their belts due to high inflation and interest rates having been raised to their highest level since 2008. Topps Tiles said the UK tile market is down between 10% and 15% compared with 2023.
Sales to trade customers continued to be more resilient than sales to homeowners, it said, while it continued to make "significant" gains in online sales. The London-listed firm added that positive UK-wide data on inflation, wage growth and consumer spending in recent months "provides some confidence in a cyclical recovery and the group is well-positioned to benefit from this due to its growing market share".
The UK's headline inflation figure has dropped to the Government's target of 2% last month, as reported by the Office for National Statistics. This suggests that the steep price increases seen over the past two years may be subsiding.
Despite this, Topps Tiles has indicated that the recovery hasn't yet impacted their end markets. The company plans to continue with a range of strategies to drive sales, including a focus on business-to-business trade and enhancing its website.
Topps Tiles is also set to launch a "modern trade app" aimed at becoming the primary platform for many of its trade customers. Additionally, the company is working on clearer pricing strategies between its business and homeowner customer segments.
In an effort to broaden its market reach, Topps Tiles is looking to diversify its product range. This includes adding laminate flooring, shower panels, and "luxury vinyl tiles" to its inventory, aiming to increase its addressable market from an estimated £1.2 billion to £2.1 billion annually.
