Travis Perkins buoyed by strong consumer sales
Building supplier specialist Travis Perkins reported a strong set of results for its consumer division for 2015/2016, with positive l-f-l sales on 2015. However, the retailer reported a 1% fall in group profits owing to a
decline in its plumbing & heating division. Travis Perkins also incurred a charge of £57m in 2016 due to store closures across the group.
The retailer has continued to expand its consumer store network, focusing on Wickes and Toolstation, opening 46 new stores in 2016. Wickes has performed particularly well, and this saw Travis Perkins invest in improving the instore experience and refitting 46 of its stores to its new format. Wickes has also rationalised their distribution network as it sees the potential to improve operational efficiencies across its business. The retailer clearly sees growth opportunity in the DIY sector and intends to continue investing and reformatting existing stores in 2017. The retailer has also implemented other initiatives to grow its retail businesses including onehour delivery times slots, a guaranteed 20-minute click and collect service to its Toolstation customers, improved product ranges, store refurbishments and subletting of space helping it to outperform the market.
In 2016, Wickes was the big winner in DIY, as B&Q continued with its store closure programme, and Homebase continued to underperform, even following its acquisition by Bunnings. However, 2017 is expected to be more challenging as the market contracts and B&Q will look to realise the benefits of its store rationalisation programme and invest in new initiatives such as opening a new smaller format store pilot in London. Bunnings will look to compete on price and drive footfall to its stores and the general merchandisers are expected to continue to grow share as consumers begin to trade down on products. Travis Perkins faces a tougher market and rising competition, but has been proactive and innovative with Wickes by shedding space in its stores, focusing on click and collect that has been well received by its customers and focusing on price.
Source: GlobalData 2nd March 2017