COVID’S DIY BOOM SEES KINGFISHER’S PROFITS SURGE
The coronavirus pandemic has inspired many people to get stuck into some DIY. This is likely down to a combination of spending more time at home – especially during lockdown – and having more time (and potentially money) to spare.
This shift in consumer habits has been great news for retailers in the home improvement space. Just take B&Q owner Kingfisher, which recently announced that the surge in sales witnessed during lockdown has continued even with restrictions easing.
According to recent reports, Kingfisher revealed a significant 16.6% increase in same-store sales for Q3 to 19 September, as well as a spike in half-year profits.
The lockdown was tough for the retail group initially, as it decided to voluntarily close stores in order to implement social distancing measures. Yet, when the stores reopened, Brits flocked in their droves, eager to spruce up their homes and gardens while stuck at home.
The ramping up of its click and collect service also saw online sales surge during the summer months.
Results for the six months to 31 July were a slight improvement on City predictions: actual sales totalled £5.92bn, while forecasts stood at £5.9bn.
Adjusted pre-tax profits increased by almost a quarter (23.1%) compared with 2019, at £415m – City analysts predicted £361m, a 7% rise on the £337m recorded in 2019. UK same-store revenues are reported to have increased by 2.3%.
Kingfisher’s chief executive, Thierry Garnier, confirmed that the promising trend in sales seen in Q2 had continued across all markets in Q3. Inspired by the trend, he announced additional investment in the group’s digital arm, which includes Castorama in France.
He commented: “The crisis has prompted more people to rediscover their homes and find pleasure in making them better. It is creating new home improvement needs, as people seek new ways to use space or adjust to working from home.
“It’s also clear that customers are becoming more comfortable with ordering online. And delivering value to consumers is imperative against a challenging backdrop.”
At the height of lockdown, Kingfisher announced that the items that saw the biggest increase in sales included paint, wallpaper, plants and compost. This is echoed by paint specialist AkzoNobel, which recently revealed that its total revenue for Q3 is predicted to be close to previous years, despite initial challenges.
Though trends vary between markets and regions, there’s strong end market demand for decorative paint in Europe as well as South America, and things continue to improve for its performance coatings.
If you’ve enjoyed strong retail sales recently, you’ll want to ensure the trend continues – and key to this is your marketing strategy. If you need help creating and delivering innovative campaigns that resonate with your audience, please email email@example.com.