Kingfisher will continue to benefit from consumers staying home amid COVID-19, says GlobalData

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Following today’s release of Kingfisher FY figures for 2019/20, Amy Higginbotham, retail analyst at GlobalData, a leading data and analytics company, comments: ‘‘Kingfisher’s update on its recent trading indicates that the UK DIY market has so far demonstrated resilience against the coronavirus outbreak, with many consumers carrying out home improvement tasks such as painting and decorating while in self-isolation. Kingfisher reported that sales in the UK and Ireland jumped 37.7% in the third week of March, while Wickes announced a significant uptick in online sales of paint and paintbrushes during a similar period.

“The COVID-19 outbreak has had a disastrous impact on Kingfisher’s other European businesses, particularly in France, where it has closed all of its stores, and where l-f-ls dropped 97.2% in the  third week of March. The UK government’s recent announcement to introduce stricter lock-down rules will pose similar challenges for its UK businesses, particularly B&Q, which is already fragile. Although the DIY sector has been categorised as ‘essential’ by the government, which means that Kingfisher will not be forced to close its UK stores, both B&Q and Screwfix will be impacted by a severe drop in footfall as consumers go out only to purchase essential items. Some spend on discretionary items such as paint will shift online instead of being lost completely, and Kingfisher points to improvements in its home delivery and click & collect capacity to help deal with an increase in demand.

“Complying with the FCA’s request, Kingfisher has delayed the publication of its FY2019/20 results for at least two weeks, releasing only sales figures for Q4 and for the full year ending 31 January 2020. Group sales fell -0.8% to £11,513m during the year, with sales dropping in all territories apart from the UK (where it achieved marginal growth), Poland and Romania. This comes in spite of a stronger Q4, when group l-f-ls returned to growth (+1.7%), which Kingfisher attributes to the implementation of a new trading approach, including reintroducing trading events.

“Growth in the UK and Ireland, where sales reached £5,122m for the year, continues to be driven by Screwfix, where total sales and l-f-ls rose 9.4% and 5.0% respectively, with price investment showing early signs of paying off. B&Q remains a concern for Kingfisher in the UK, with sales declining 3.1% and l-f-ls dropping 2.9% during the year.”