Retail Viewpoint – Kingfisher 30 April 2017
Screwfix continues to prop up UK as B&Q transformation continues.
While B&Q suffers following store closures, with sales falling 4.4% to £908m, Screwfix continues to grow at an impressive rate, with sales up 20.3% on the year to £362m and l-f-l growth of 12.6%.
Alongside extended ranges, Screwfix’s strong multichannel credentials are clearly driving sales, with a growing acceptance in the DIY sector for purchasing through remote channels and utilising the convenience offered by click & collect.
With the store rationalisation plan now complete, B&Q can focus on developing its existing estate by rolling out its new ‘Big Box’ format, which features new product ranges and aims to improve the customer experience. B&Q’s investment in online has been rewarded with strong digital growth (+31%), in contrast to Bunnings’ more store-centric strategy. B&Q also trialled its first convenience store in north London in March 2017, which is aimed at attracting younger shoppers as it seeks to bridge the generational gap that has developed in those undertaking home improvement.
While supported by Easter in Q1, the slowing housing market and weak consumer confidence will impact demand for major DIY purchases in 2017. However, investment in its offer and the Kingfisher One program; which includes a unified buying strategy, and efficiencies through a standard operating model throughout its Europe-wide businesses, will help the group emerge strongly once conditions improve. However, Kingfisher must be quick to implement these strategies and realise any benefits, as Australian retailer Bunnings continues to transform the Homebase business and compete head-on with B&Q.
Source: GlobalData 24 May 2017