The profits of the UK’s two leading DIY chains have been slashed as they struggle to entice shoppers in.
Dismal weather and the resulting poor sales of outdoor products in March contributed to a 70 per cent drop in B&Q’s profits from £71.2m to £18m for the 13 weeks to 29 April. Gardening and outdoor products made up 20 per cent of the company’s sales in this quarter, but like-for-like sales fell 8.8 per cent to £945m.
Rival Homebase’s profits more than halved in the 12 months to 28 February, with the 54 per cent fall blamed on rising costs and a four per cent drop in like-for-like sales.
Homebase said the DIY market had been “very challenging”, with weak demand and strong competition affecting sales. It now has 297 stores and claims it gained market share last year.
Both firms admitted their discount promotions failed to stimulate shoppers and they would focus less on aggressive promotions this year — something likely to be welcomed by garden-centre operators.
Chief executive Gerry Murphy of the Kingfisher Group, which owns B&Q, described the home improvement market as “very tough”, with the persistent cold weather this year delaying the start to the “key” garden and outdoor season.
He said sales over the Easter and bank holiday periods were stronger because of promotions and improved weather but noted it was not clear whether improved holiday sales represented “an underlying recovery in demand”.
Despite expanding to 322 stores with 2.3 million square metres of selling space, the company has experienced ongoing sales decline. Total sales in the 12 months to 28 January fell 3.7 per cent to £3.9bn.
Murphy believes B&Q has made significant progress with its action programme launched last year to set up in-store “service squads” to provide assistance to customers, which are now in use at 200 stores.
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