The UK's discount retailer landscape has witnessed a significant shift with The Works reporting a 3.3% rise in sales and revenues of £260 million, accompanied by an adjusted profit increase of 44% to £7.2 million. This uptick in performance is largely attributed to the impending social media ban for under-16s, with CEO Gavin Peck highlighting the correlation between the government's policy and a surge in demand for 'screen-free activities' within his stores.
The Labour government's plans, unveiled last month by former Prime Minister Sir Keir Starmer, include a comprehensive ban on social media usage for minors from January 2027, as well as a midnight curfew for 16 and 17-year-olds. This heightened awareness among parents regarding the negative impacts of excessive screen time is driving consumers towards traditional toys, games, and arts and crafts.
In response to changing consumer behaviour, The Works has invested heavily in rebranding itself as a premier destination for 'affordable, screen-free activities for the whole family'. Over the past 18 months, this strategic shift has been accompanied by intensified public and governmental scrutiny of digital device usage among young people. Enhanced marketing efforts focused on this new positioning have yielded higher engagement and stronger sales.
The company's decision to discontinue online sales in March 2026 marks a pivotal moment in its business strategy. By diverting resources towards an ambitious expansion plan, which includes rolling out more than 100 new stores across the UK, The Works is bolstering its high street presence. With online shopping accounting for less than 10% of sales and never generating a profit, this shift was met with shareholder approval.
The Works is also exploring opportunities to acquire sites vacated by TG Jones, following its restructuring, which resulted in up to 150 former WH Smith closures. Early discussions are underway regarding several potential acquisition targets, signalling The Works' intent to strengthen its market share. Moreover, CEO Peck has called for reform of the business rates system, arguing that the current framework unfairly burdens retailers and is based on outdated property valuations.