DIY chain B&Q can’t find a fix for its suffering fortunes amid “challenging” conditions, it has admitted.
Veronique Laury, chief executive of the retailer’s parent company, Kingfisher, said the outlook for the UK market remains “uncertain” as results revealed a near-nine per cent sales fall in the UK and Ireland in the first quarter.
B&Q’s total sales were around £828 million during the period, which was marred by temporary store closures as a result of the extreme weather brought during the “Beast from the East”.
However, Laury suggested weak consumer demand had also affected the chain’s performance.
She said: “It was a challenging start to the year, with exceptionally harsh weather across Europe and weak UK consumer demand.
“This impacted footfall, especially sales of weather-related categories. February and March were particularly affected, with sales improving over the course of April and into May.
“Market conditions continue to be mixed. The UK is uncertain.”
In contrast, B&Q’s sister company Screwfix recorded a 3.6 per cent rise in like-for-like sales. But Kingfisher’s French DIY chain Castorama also suffered an eight per cent fall in custom. The position there is described as “encouraging, but volatile”.
B&Q has closed 65 outlets over the last two years at a cost of around 3000 jobs in the UK and Ireland. That comes despite a pre-referendum warning from the chain’s bosses that a No vote would help safeguard its position.
Yesterday Laury said the group will turn its position around as it pursues a strategy aimed at unifying product lines and reducing costs.
She stated: “We are on track to deliver our One Kingfisher strategic milestones for the third year in a row and we continue to see tangible delivery of our plan.
“Around 40% of our ranges are now unified and continue to be well received by customers. Sales of these ranges, excluding outdoor products, are up, and we expect to grow the full year group gross margin, after clearance costs.”
Kingfisher’s share price slipped by 3.1% to 286p in morning trading as the news emerged.
Richard Hunter, head of markets at Interactive Investor, commented: “There is little to suggest at this stage that the full-year performance will be missed, since April and May saw some improvement.
“Nonetheless, there has been enough uncertainty to put pressure on the performance of the stock, which has dropped 16.5% over the last three months alone. Even so, the market view towards the company remains optimistic.”
Meanwhile, figures from the Office for National Statistics (ONS) show takings were on the turn as retail sales rose by a better-than-expected 1.6% in April.
But Rob Kent-Smith of ONS said underlying conditions had not shifted, stating: “Retail sales bounced back in April, as petrol and other sales recovered from the snowfall. But the underlying position remains subdued with the volume of goods sold over the last six months broadly unchanged.
“Department stores declined following relatively strong sales last month, when their online sales were boosted during the adverse weather.
“Over the longer-term, retail sales growth has slowed considerably, with increases in food, household goods and internet retailers being largely offset by declines across all other types of retailing.”
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