Sluggish consumer confidence hit trading at Topps Tiles (TPT) in the second quarter, resulting in a 0.2 per cent like-for-like sales decline for the first half. This weaker than expected demand was exacerbated by rising costs, largely due to inflation, which resulted in adjusted operating profit tumbling 8 per cent to £6.5m. And while the underlying pre-tax profit (£4.7m) was ahead of guidance (£4.3m), current trading has deteriorated: same-stores sales in the eight weeks to 25 May fell 2.6 per cent.
In response, management has implemented self-help initiatives and earmarked £2m of cost savings for the second half. This includes more promotional activity, improved store interiors and pushing for more trade business. Half of the cost savings will come from trimming staff hours and cutting the employee bonus scheme. The remainder will come from fewer discretionary activities.