Kingfisher Q3 Results – Verdict Viewpoint
A third quarter of solid l-f-l growth with continued momentum from Screwfix driving Kingfisher in the UK.
Kingfisher UK and Ireland achieved solid growth in Q3 driven by impressive l-f-l sales from Screwfix, which opened eleven outlets and extended ranges in plumbing, heating and security products.
(Results for the 3 months to 31st October 2016)
Total UK & Ireland Sales +2.5%
L-f-L Sales UK & Ireland +5.8%
However, total sales for B&Q declined in Q3, a result of seven store closures. The trading environment for B&Q is expected to get tougher following new arrival Bunnings’ plans to invest heavily in innovation and grow its presence in the UK DIY market. To counter this, B&Q has recently announced plans for a one-hour click and collect service and the roll out of new format ‘Big Box’ stores. These new stores aim to have improved visual merchandising, better in-store navigation along with shops-in-shops that the retailer hopes will increase its customer reach. B&Q will need to emphasise its value credentials and continue to develop its digital capabilities to stand out from growing competition.
The business environment will no doubt be challenging for Kingfisher as consumer confidence remains unstable post-Brexit and a slowdown in housing transactions will dampen demand for home products.
However, Kingfisher remains confident in its future growth. The retailer expects to significantly ramp up activity in the second year of its five-year business programme – creating a unified offer across its fascias, focusing on online and driving operational efficiencies. Improving efficiencies will allow the retailer to be more price competitive, while enhancing its online offer will meet changing consumer attitudes towards buying DIY through this channel.
Source: The Verdict Retail Team