Ben Staniforth, Research Analyst
Being locked in our own houses for months on end has meant that normal activities such as meeting up with friends and playing team-based sports became impossible for a time and is difficult even up until now.
Some permissible activities have, however, provided some much-needed respite from the boredom of lockdown. While some opted to take up running or cycling and many decided to relax in front of the TV and play video games, Kingfisher’s recent results seem to show that lots of us decided to finally fix those pesky DIY projects around the house that had been put off for years.
Despite recording a 1.3% sales drop in the six months to 31st July, reflecting the impact of lockdown on its retail business, online sales grew 164% at the B&Q owner, now accounting for 19% of total sales. The third quarter painted an even rosier picture, with like-for-like sales up 17%, showing strong demand going into the second half of the year. All in all, this helped profits to climb 62.4% to £398m in the six-month period, welcomed growth from a company that has struggled with flat and even declining performance for a number of years now.
The firm’s retail-heavy operations have felt the saddening forces of the declining demand for bricks and mortar stores, proving a drag on performance. However, the firm’s investments into improving its e-commerce capabilities have come at just the right time, coinciding with the jump in online and DIY sales.
With the firm finally showing some strong performance, questions will soon turn to whether consumers will continue their DIY projects or if demand will tail off somewhat. Given the re-rise in infection rates across the UK we would anticipate that further local lockdowns and nation-wide restrictions will continue to provide a tailwind to performance for the company. Long-term, however, it will be interesting to see if the current DIY trend sticks and whether consumers will start to increasingly utilise home stores such as B&Q to take on projects around the house.
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