Brits behind on DIY, says B&Q owner Kingfisher

Third-quarter sales have slumped at Kingfisher, Europe's largest home improvement chain, and DIY-shy customers in Britain are to blame.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
If it ain’t broke, don’t fix it, or so the saying goes. But according to Kingfisher, even the ‘broke’ things aren’t getting fixed these days. B&Q’s like-for-like sales (which don’t include new stores) in the UK have fallen 4% to £906m in the three months to 27 October.

The home improvement giant cites the ‘generally weak consumer backdrop’, brought about by the recession, for the poor third-quarter showing. Across the whole group, revenue stands at £2.7bn, down 3.9% on last year.  

However, by hiking up prices and cutting costs, Kingfisher has managed to plump up its retail profits. Across the international business, which includes Castorama and Brico Depot in France, retail profits are up 0.1% to £257m. In the UK, B&Q has managed a profit increase of 1.7% to hit £45m. There’s a lot of net cash sitting on the balance sheet too: at last count Kingfisher has £222m to spend next year.

Screwfix, Kingfisher’s wholesale business aimed at the UK’s smaller tradesman market, has also had a cracking three months. It’s new catalogue and the launch of a newfangled ‘click, pay and collect’ service has been a roaring success. Total sales are up 10.9% to £149m and retail profit has hit £14m, up 19.8% on last year.

Ian Cheshire, group CEO, seems content with the DIY chain’s performance: ‘Kingfisher is in good shape and I remain enthusiastic about our longer-term prospects,’ he says. He deserves a pat on the back for the part he’s played in Kingfisher’s profit boost: Cheshire’s new strategy of cutting out the middlemen to source products direct from manufacturers has sliced a lot of fat from the chain’s costs.

Not that the markets are all that impressed. With no end to the consumer gloom in sight, Kingfisher shares fell 4.2% to 276.5p this morning.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Latest on MT

Do companies actually believe in gender equality?

Do companies actually believe in gender equality?

Diversity programmes may be great to pad out the CSR page on your website, but be ready to practise what you preach.

Which Olympic sport matches your small business style?

Which Olympic sport matches your small business style?

Sponsored: Are you a target-focused archer or a soaring pole vaulter?

Aldi and Lidl will continue to grow

Aldi and Lidl will continue to grow

UPDATE: The discounters' market share is already expanding at the expense of the Big Four, and economic uncertainty over Brexit will only help them.

PwC thinks you can't afford to ignore these 8 pieces of tech

PwC thinks you can't afford to ignore these 8 pieces of tech

The accounting firm says it has identified the 'megatrends' businesses need to be prepared for.

The reason women are less likely to get graduate jobs

The reason women are less likely to get graduate jobs

Despite the high priority employers give to diversity, the gender gap in graduate recruitment persists.

Why Philip Green's savaged reputation matters

Why Philip Green's savaged reputation matters

The retail tycoon is still rolling in wealth but his public image could be problematic - and what about that knighthood?