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B&Q’s UK sales nosedive in Q2

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Trading at home & DIY retailer B&Q fell sharply in the second quarter of this year, as the closing down sales of failed competitor Focus DIY significantly ate into its business.

An update from parent company Kingfisher released today shows sales at B&Q dropped 6.7 per cent on a like-for-like (LFL) basis in the 11 weeks to July 16th 2011, largely down to the clearance activity at the 180 Focus stores around the UK.

The retail group’s other UK business Screwfix recorded a 10.5 per cent boost in total trading during the period due to its continued expansion but overall UK trading for Kingfisher was still down 5.5 per cent LFL compared to the same period last year.

For its full first-half period, the 24 weeks to July 16th, Kingfisher’s total group sales rose 1.5 per cent year-on-year, thanks largely to strong growth in international markets such as China.

Ian Cheshire, CEO of Kingfisher, commented: “As anticipated, conditions in our second quarter were tougher than the first quarter which benefitted from favourable weather.

“The UK market remains challenging compounded by disruption in the second quarter from heavy stock clearance activity by a major competitor closing down.

“This clearance activity is now largely complete and looking ahead I am delighted that we have been able to secure excellent new sites for B&Q.”

Q1 sales rose 1.5 per cent LFL at B&Q but the damp weather during the last three months meant that trade in outdoor seasonal products was down 20 per cent during the following quarter.

It was confirmed earlier this month that Kingfisher was taking control of 30 ex-Focus stores following approval by the Office of Fair Trading and the group seems confident that gross margins have been maintained thanks to increased sales of higher priced goods and more direct sourcing.

Cheshire added: “These are testing times for retailers, particularly in the UK, but also an opportunity for strong businesses such as ours to strengthen their position.

“We expect to emerge from this year in excellent shape and well prepared to start delivering the next phase of our growth plans.”

Published on Thursday 21 July by Editorial Assistant

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