How Kingfisher, owner of B&Q and Screwfix, envisions a faster, more convenient future of commerce – RXUK

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B&Q and Screwfix owner Kingfisher foresees a future in which its customers continue to work from home, shop online – and especially via mobile – and in smaller stores. Today, the company is posting record revenues and profits and says it has stepped up investment in areas ranging from digital to Screwfix as part of its plans for future growth.

The DIY and trade equipment retail group believes shoppers will continue to want speed and convenience and that this “will continue to drive the move online in our industry, as well as the need for a more range of smaller, more localized stores,” as he said in today’s statement. “In response, we continue to increase our overall store count, while reducing our average store size.” It also means a strong focus on mobile-first digital commerce and fast delivery.

Kingfisher suggests more people will spend more time working from home than before the pandemic, making them more likely to spend on their homes and gardens.

The update came as Kingfisher reported full-year sales, with the group’s sales reaching £13.2bn in the year to January 31, 2022. is 6.8% more than the £12.3 billion announced a year earlier. E-commerce sales were up 5.3% over the previous year – and are ahead of 171% over the previous year. Omnichannel engagement, he says, remains high and mobile is his fastest growing (+11.2 YOY, +301% 2YOY) and largest online channel, accounting for 54% of commerce sales. electronic.

In the UK and Ireland alone, total sales increased 13.3% – and 11.8% LFL – for the full year, after growing 65% LFL in the first quarter – one year after the pre-pandemic situation – and by 3.8% in the second quarter before falling in the third (-3.5%) and fourth (-2.9%) quarters, compared to the lockout and the holidays of the previous year.

Pre-tax profits of £1bn after a one-off £58m credit were up 33.1% from £756m a year earlier. In the UK & Ireland, retail profit rose 16.7% to £794m.

Kingfisher chief executive Thierry Garnier said the group had seen growth across its business, with “resilient” demand from both DIY and trade/do it for customers. me. The two segments each represent half of the group’s sales.

Garnier said: “We continue to leverage our store assets and group technology to advance our e-commerce proposition, with faster click and collect and home delivery and wider product choices for our customers. clients. 18% of sales are now made online, ten percentage points more than two years ago. B&Q had a bumper year, with sales exceeding £4 billion. It was also a record year of expansion for Screwfix, with 70 new stores opening in the UK and Ireland and Screwfix France showing very promising early progress.

B&Q: focus on small stores and digital

B&Q sales reached £4.2 billion for the full year, up 12.7% overall year-on-year, while like-for-like (LFL) sales, which eliminate the effect of store openings and closings, increased by 12.3% and 26.9% compared to the previous year. LFL sales were up 81.9% year over year in the first quarter of last year – when the prior year comparison was with pre-pandemic – and then declined in the second (-1 .2%), third (5.6%) and fourth (-2%) quarters.

Online sales were up 13% year-over-year and 146% year-over-year, and accounted for 11% of total sales. During the year, B&Q opened 11 new stores, including five compact-format stores and six in-store stores at Asda as Kingfisher tests smaller formats to increase market share in urban areas. Such partnerships, Kingfisher believes, will help it both win new customers and generate additional sales.

In store, it is also pursuing a resizing strategy following trials. In one case, at B&Q Canterbury, downsizing reduced costs by 33% but maintained similar sales levels. Around 40 big box stores are now expected to be the right size over the next 10 years, with some space available to reallocate to online operations and dark stores.

B&Q is also testing Scan and Go and has introduced self-checkout in 110 stores. An online paint mixing service now sits alongside online 3D design of kitchens, bathrooms and now storage furniture. It also relaunched its TradePoint business with a focus on online loyalty and service. At the end of the year, it launched a market place on its website, with the ultimate ambition of tripling the offer it sells online.

Screwfix: focus on mobile, small stores and fast delivery

Sales of Screwfix in the UK and Ireland reached £2.3 billion, 14.3% higher than the previous year and 10.9% higher than LFL, after increasing in the first (+39% LFL), second (+15.9%) and third (0.2%) quarters before declining in the fourth (-4.2%). E-commerce sales fell 2% from “exceptional periods of digital-only trading the year before,” but were up 161% from two years earlier. Some 67% of total sales took place online in the past year. That’s down from 78% the year before, but about double the 33% in online sales two years earlier.

Mobile has remained the biggest channel for online orders in a year in which Screwfix launched its one-hour Sprint delivery service – although it says average delivery times are currently 45 minutes. Its mobile app was upgraded with improved search and geolocation for easier in-store pickup as well as Sprint integration – and was subsequently downloaded over 2 million times. The retailer has also trialled a collection format store in London Victoria and will now use its knowledge to open more in an XSR format which takes the core Screwfix range to smaller format stores. It opened five in the second half of last year and now plans to open more.

By the end of the year, it had opened 68 new stores to take it to 790 in the UK and Ireland (+12 to 24), and is aiming for more than 1,000 in the medium term. Screwfix has also launched in France online only and plans to open stores in the first half of its current fiscal year.

Russia–Ukraine War

The retail group says it has been shocked by events in Ukraine and is working with aid agencies both from a group perspective and locally in Romania and Poland, where its local businesses raise funds and donate products and time to help refugees. It has no direct exposure to Russia, but has decided to stop selling all products it previously sourced from Russian and Belarusian suppliers, and is working with suppliers to ensure that no materials or components does not come from either country.

Supply chain issues

Kingfisher says it has been able to effectively manage its supply chain and logistics needs, working with suppliers and logistics providers while improving its forecasts and placing orders well in advance of peak periods and events such as the Chinese New Year. He says he has successfully managed shipping container costs and availability, while dealing with truck driver shortages.

“Looking forward to the year ahead, as the macroeconomic and geopolitical environment is uncertain, you can expect us to continue to focus on delivering revenue and growing market share, an execution solid, effective management of our gross margin and active and reactive management of our operating costs,” said Garnier of Kingfisher.

Both B&Q and Screwfix are among the top 50 retailers in RXUK Top500 research.

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