Kingfisher, the owner of the B&Q and Screwfix chains, has reported a slight decline in sales after facing tough comparables with a booming DIY market during the height of the pandemic.
The business, which also operates Castorama and Brico Depot in France, saw its total sales fall 4.2% on a constant currency basis to £3.25bn during the three months to 30 April, with like-for-likes down 5.4%. UK and Ireland like-for-like sales fell by 15.8%, offsetting more robust performance overseas.
However, group like-for-like sales were up 16.2% against pre-pandemic levels in 2019, with Chief Executive Thierry Garnier noting that the company had retained a “significant proportion” of the increased sales generated over the last couple of years.
The company expects demand for DIY goods to hold up in the coming months despite the expectation that consumer spending will drop as household budgets are squeezed by rising inflation. Kingfisher pointed to a lessening of its sales decline over the first two weeks of May, down only 2.5% on a like-for-like basis, after seeing “resilient demand” across both its DIY and trade operations.
Kingfisher said it was “mindful of the heightened macroeconomic and geopolitical uncertainty that has emerged since the start of the year”, but added that it would look to increase its market share. It left profit guidance unchanged at £770m for the full financial year.
Like some other retailers, Kingfisher faced disruption to its supply chain and related increases in costs during the pandemic. Garnier said today: “We continue to effectively manage inflationary and supply chain pressures. As a result, our product availability is now very close to ‘normal’ levels across all our banners, and we continue to deliver value for our customers through our own exclusive brands and competitive prices.”
He added: “We are focused on delivering on our strategic objectives and growth initiatives, including the growth of our scalable e-commerce marketplace, the expansion of Screwfix in the UK and France, new store openings in Poland, and further increasing our trade customer base.”
NAM Implications:
- A key issue is the extent to which full inflation is yet with us.
- (i.e think 15%+ )
- And building uncertainty re job/health security diluting eliminating demand…
- All of which will show up in supplier/retailer sales in retrospect.
