You didn’t return any results. Please clear your filters.
21 September 2022
Kingfisher sees COVID boost to DIY sector fade
Home improvement retailStrategy
Kingfisher, the home improvement company whose brands include B&Q, Screwfix, Brico Dépôt and Castorama, saw sales and profits fall in the first half as the effects of a COVID bounce wore off, but the business believes long-term trends are in its favour.
Sales were down 4.1% to £6.8bn in the six months to end July 2022; pre-tax profit fell 30% to£474m.
E-commerce sales fell 19% as footfall returned to stores but penetration of 16% remains much higher than the pre pandemic level of 7%.
Digitally-enabled sales now account for 24% of Kingfisher group sales.
The business acquired 2.8 million new customers during the first half of 2022 (exceeding pre-pandemic levels) and retention rates remain high.
Sales are evenly split between the DIY and DIFM/trade markets (but the latter is seen as an important £50bn addressable opportunity in the UK, France and Poland).
As working from home becomes the ‘the new normal’ for many people (Kingfisher’s own surveys indicate people WFH do so for an average of 2.5 to 3 days per week), they have more time to look critically at their domestic environment.
Average spend on home improvement by those WFH is as much as 40% higher than all active home improvers (in part because of the greater ‘wear and tear’).
Nine in ten home improvers are looking for ways to reduce their energy consumption; six in ten are looking to improve the energy efficiency of their homes in the near future 10%.
Few people know or understand the energy-saving options available and Kingfisher believes it is well positioned to help them address this.
Kingfisher is rolling out marketplaces in the UK and Europe to take advantage of incremental profit opportunities; ultimately it sees this channel delivering 40% of group e-commerce sales (excluding Screwfix).
“Consumers continue to spend on repairs, maintenance and indeed renovations during these times, which is now reinforced by the new industry trends,” said CEO Thierry Garnier in the course of an earnings call. Analysts are less optimistic, however, with one referring to the “positive tailwinds” of lockdown being replaced by a “powerful headwind of a cost-of-living crisis”.