Kingfisher will emerge from COVID-19 as a much stronger business, says GlobalData

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Following today’s release of Kingfisher FY2020/21 figures; Amy Higginbotham, retail analyst at GlobalData, a leading data and analytics company, offers her view: “FY2020/21 has been a year of positive change for Kingfisher. It has undoubtedly benefited from high demand for home improvement, as well as its essential retailer status which allowed the majority of its stores across Europe to remain open during periods of lockdown, but its strong performance can also be attributed to the progress it has made with its ‘Powered by Kingfisher’ strategy.

“Kingfisher’s group sales rose £830m to £12.3bn during the year, and retail profit rose 27.4% to just over £1bn thanks to improvement in gross margin. The momentum Kingfisher maintained throughout FY2020/21 has shown no sign of slowing during the first few weeks of its new financial year; group like-for-like sales rose 24.2% in the seven weeks to 18 March driven by strong demand for DIY in the UK and France.

“Growing online sales is a key priority as part of its ‘Powered by Kingfisher’ strategy, and investment in this channel allowed Kingfisher to respond quickly and effectively to changing consumer behaviour during COVID-19. Online sales rose 158% during FY2020/21, driven by strong growth in click & collect (+226%) which now accounts for 78% of group online sales, up 16ppts on last year.

“Kingfisher performed particularly well in the UK & Ireland during the year. B&Q’s simple and affordable GoodHome ranges appealed to less-experienced DIY-ers carrying out home improvement tasks during lockdown, while the opening of concessions within ASDA stores has made shopping at B&Q more convenient. B&Q’s recent investment in its Kitchen category, including launching a new range and introducing an installation service, will also bear fruit when showrooms reopen on 12 April.

“The remainder of FY2021/22 will be more challenging for Kingfisher as strong growth achieved during COVID-19 annualises out, and as consumers shift spend away from the home back to leisure and travel as restrictions ease. But, Kingfisher’s ongoing investment in online (including trialling same-day delivery at B&Q in the UK), new ranges and new store formats mean the business is well-placed to outperform the market.”