Kingfisher, parent company to B&Q and Screwfix, has admitted it will face increased rivalry from Homebase‘s new owner Bunnings. In riposte, Britain‘s biggest home improvement group has sent a team to Australia to scope out the competition.
“There is no question that Bunnings will be a strong competitor in the UK,” said CEO VÃ©ronique Laury after revealing a profits that fell by more than a fifth to £512m in the year to January. “We are following their plans closely.”
It is understood that Bunnings will be reducing prices and sourcing more professional builders and decorators, as Homebase disappears from the UK market and is replaced with the Bunnings name.
Although Laury is “very respectful” of her new contender, she said it would have “work to do. Homebase is very different to Bunnings.”
Kingfisher has its own strategy to focus on, with a view to shut down 60 B&Q stores as it accelerates Screwfix expansion.
In January the group announced a restructuring plan that will cost £800m. On Wednesday Laury said that “by putting customer needs first”, the group will be able to “deliver a £500m sustainable annual profit uplift, over and above business as usual”.
On the results, Laury said: “We have delivered a good ‘business as usual‘ result with both sales and profit growth in constant currencies, driven by our performance in Poland and the UK, driven largely by Screwfix, and a stable performance in France.
In the short term, the fundamentals of the UK economic backdrop remain positive, although we remain cautious on the outlook for France. The outlook for the wider global economy remains uncertain, and the impact of the outcome of the UK EU referendum is unknown.”