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26 March 2021

Generation DIY

As many of us have spent more time in our homes in the past 12 months, the attention of the average homeowner has turned to DIY. In many cases, what was once a chore has become somewhat of a hobby.

Under Government guidelines, hardware stores were allowed to keep their physical shops open as an essential retailer, fuelling the increase in UK DIY-ers and demand for home improvement goods. Kingfisher, the owner of DIY giant B&Q and builders’ merchant ScrewFix, reported that its pre-tax profits for the year to 31st January 2021 increased by 44% as consumers across the country looked to spruce up their homes and gardens.

Although we all spent more time in our homes in 2020 than normal, one demographic in particularly sought to improve their abodes, contributing heavily to the industry’s upturn in the last 12 months.

According to Kingfisher CEO Thierry Garnier, the impact of pandemic meant that those aged 18-34 were responsible for more home renovations than any other age group. The firm’s corporate results presentation read: “During the COVID crisis we’ve seen the emergence of a younger generation of ‘DIY’ers’, where interest, new skills and enthusiasm for DIY has grown considerably. While this accelerated trend is still emerging, it is encouraging and enables us to capture a broader range of customer segments.” The report also stated that 20% younger DIY-ers had tried home improvement for the first-time during lockdown.

The report also suggested that as these young consumers work on their homes, their skills improve and DIY develops into a hobby, ultimately resulting in long-term customers for Kingfisher’s brands.

Despite its physical stores being allowed to remain open during the 2020/21 lockdowns, Kingfisher said that it was witnessed a marked increase in its proportion of online sales. Kingfisher reported that its e-commerce sales in the year to 31st January were at 18%, compared to just 8% the year before. One week in the summer of 2020 saw a high of 1.5m online orders.

The influence of lockdown and spending time at home has been witnessed throughout B&Q’s stores across Europe. While like-for-like sales increased by 10.7% in its UK and Ireland sites, a 10.8% rise was seen in Romania, 5.1% in France, and 4.9% in its Polish stores. The continent-wide increase in demand has helped create 4,800 new jobs at Kingfisher sites in the UK and on the continent.

Kingfisher has made an impressive start to this financial year. Like-for-like sales across the group were up by more than 24% between February and 18th March 2021, with particular demand witnessed for outdoor products including plants and seeds, compost and pressure washers.

With many of our work/life balances changing for good as employers embrace permanent remote working, consumers may continue to invest hardware goods as they improve their homes and new-found office spaces.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
Generation DIY
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